Israel and Palestinian Authority 'in secret talks to exploit Gaza gas reserves'

The Israeli government is holding secret talks with the Palestinian Authority in a bid to develop a gas reservoir located about 36km from the shores of Gaza, according to Israel's Channel 13 News.

According to the reports, the discussions were held with the approval of Israeli Prime Minister Benjamin Netanyahu and Defence Minister Yoav Gallant and are part of political and security talks between the two sides following recent summits in Jordan's Aqaba and Egypt's Sharm el-Sheikh.

The Israeli government held internal talks last year on developing the gas field off the coast of Gaza. Talks were renewed more recently following US mediation. 

Israel has said the Palestinian Authority is unable to develop the gas field alone as legally only states are able to. Palestine is not yet recognised as a state in much of the international community.

A proposed solution would be for Egypt to sponsor the project. Israel, according to Channel 13, has already approached senior Egyptian officials with the proposal. 

Last year an agreement between Israel, the Palestine Authority and Egypt to revive gas exploration at the fields off the coast of Gaza petered out following discussions between the parties. 

That previous plan would have seen an Egyptian company facilitate natural gas production in the offshore fields using Israeli infrastructure. The PA, represented by the sovereign wealth vehicle Palestine Investment Fund (PIF), would reap 27.5 percent of profits.

The PIF’s partner, the Palestinian-owned Consolidated Contractors Company (CCC), would get another 27.5 percent. The remaining 45 percent was earmarked for the Egyptian Natural Gas Holding Company (EGAS), which would operate the project. 

It is expected that the plan reportedly currently under consultation would resemble the one discussed last year.

Israeli objections and obstacles

The Gaza gas fields were first discovered in 1999 in Palestinian territorial waters.

The first discovery, located about 36km off the coast, was called Gaza Marine 1 and contains an estimated 33 billion cubic metres of natural gas. The second field, located on the sea frontier area between the Gaza Strip and Israel, was called Gaza Marine 2 and contains an additional three billion cubic meters.

The fields have long been seen as a major stepping stone towards Palestinian energy independence, but they remained untapped mainly due to Israeli objections and obstacles. 

In November 1999, a 25-year contract for gas exploration and development of gas fields was signed between the British Gas Group (BG Group), the CCC and the PIF. 

BG Group withdrew from the project in 2016 and handed it over to Shell, which in 2018 also withdrew from the agreement due to various disputes. 

The PA is projected to gain an annual income of between $700m-$800m if the gas fields are fully operational - equivalent to $7bn-8bn within 10 years.

This article is available in French on Middle East Eye French edition.