British Gas is considering construction of a natural gas pipeline stretching from the Marine gas field off the Gaza coast to El Arish in Egypt. The proposed pipeline is part of a project to export Palestinian liquid gas through Egypt. Israel has chosen to buy gas from Egypt, in preference to Palestinian gas.
British Gas Israel country manager Eric Ludtke says that the pipeline will supply a minimum of 1.2 billion cubic meters per year for 50 years. Commercial operations are projected to commence in 2009-2010.
Two weeks ago, the Palestinian Authority (PA) and Egypt signed a government protocol arranging the sales of Palestinian gas to Egypt, and its export to overseas markets in the form of liquid natural gas (LNG). Other commercial agreements will be signed later as part of the initiative. “Israel has shown that it is not interested in gas, so the preferred channel for use right now is the Egyptian-Palestinian channel,” Ludtke states.
The Gaza Marine gas field has reserves of 1.2 trillion cubic feet, and the cost of development is $400 million. Trial drillings five years ago proved that gas production there was commercially worthwhile. The PA is expected to earn $40-45 million in taxes annually from the deal, and the project will create many jobs in Gaza.
At the same time, next September, British Gas will begin trial drilling at the Noa Darom field near the Israel-Gaza offshore border. The company is considering use of the Yam Thetis pipeline to transport gas from this field to the Palestinian power plant in Gaza.
Ludtke says that this field is small, with 100 billion cubic feet, and construction costs for the project will total $120 million. The field is designated to supply gas solely to the Palestinian power plant in Gaza, which currently uses diesel fuel. Use of gas is expected to substantially cut power production costs in Gaza.
Published by Globes [online] - www.globes.co.il - on July 12, 2005