Sources inform “Globes” that senior Ministry of National Infrastructures officials and senior Israel Electric Corporation (IEC) executives have proposed in recent days the suspension of negotiations with Egypt for the purchase of natural gas. They propose the opening of negotiations to buy Palestinian gas from Gazan offshore gas fields discovered by British Gas.
The proposal follows difficulties in the negotiations between IEC and the Eastern Mediterranean Gas (EMG) partnership, which represents Egypt. Joseph (Yossi) Maiman heads EMG.
Three years ago, IEC held a tender-like procedure to solicit bids for selling gas for the next 15 years. The Yam Thetis partnership, which found gas off the Ashkelon shore, and EMG were selected in the procedure.
British Gas also made a bid, but IEC rejected it, saying it was too expensive.
The officials in the Ministry of National Infrastructures and IEC proposing negotiations with British Gas say that since the deal with Egypt has stalled, and is opposed by many IEC directors, the British Gas bid should be considered.
Minister of National Infrastructures Joseph Paritzky has in the past supported the purchase of gas from British Gas, in preference to Egyptian gas. He said the circle of suppliers should be expanded, and added that buying gas from Gaza would improve relations with the Palestinians.
Prime Minister Ariel Sharon ruled against Paritzky less than a year ago, and directed IEC to pursue negotiations with Egypt. He expressed concern that proceeds from the purchase of Gazan gas would be used to finance terrorism.
A deal with either Egypt or British Gas will amount to $2 billion over the next fifteen years. A deal was signed a year ago to purchase gas for $1.8 billion over the next eleven years from Yam Thetis, and IEC is already receiving gas.
In its response, IEC said, “The company is conducting no negotiations with British Gas at this time. In the IEC tender conduced a long time ago, EMG won by 40%, and IEC is therefore continuing its negotiations with EMG.
Published by Globes [online] - www.globes.co.il - on May 13, 2004