British Gas Group wants a financially secured buyer for all the gas from its Gaza field.
Sources inform ''Globes'' that the negotiations between Israel Electric Corporation (IEC) (TASE: ELEC.B22) and BG Group plc (NYSE: BRG; LSE: BG) to buy natural gas from its reserves offshore from Gaza have run into trouble. At a meeting last week in London, BG Group told IEC representatives that it could not commit to opening the gas field until it had commitments for the purchase of all the gas from the field, estimated at 1.5 billion cubic meters of natural gas a year.
BG Group's position does not conform to the position of the Ministries of Finance and National Infrastructures that IEC will purchase up to 800 million cubic meters of gas a year from BG Group, with private electricity producers buying the difference.
BG Group told IEC that it prefers the buyer be financially secured, which means either IEC or the Israeli government. It does not want to sell natural gas to private customers who have not secured financing.
Published by Globes [online], Israel business news - www.globes-online.com - on December 16, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008