Thursday, January 24, 2008

Gaza siege intensified after collapse of natural gas deal

Mark Turner, The Electronic Intifada, 23 January 2008

Contributed by Lucia in Spain

"......Israel claims its recent moves are retaliation for continued rocket attacks originating in Gaza that despite their consistency cause scant damage and few actual casualties. But the reasons may include motivations with roots back in 2000, when the British firm British Gas Group (BG) discovered proven natural gas reserves of at least 1.3 trillion cubic meters beneath Gazan territorial waters worth nearly $4 billion.

The Palestinian Investment Fund (PIF), a financial holdings company owned primarily by independent Palestinian shareholders, is investing in the project and heads the negotiations in coordination with Mahmoud Abbas' government in the West Bank. BG won a majority stake in the concession to develop the Gaza Marine Field and originally targeted Egypt for the sale of the natural gas. But pressure from then-British Prime Minister Tony Blair led the company to redirect its efforts toward Israel and develop plans for an underwater pipeline that would transport the gas to an Israeli refinery at Ashkelon. That deal could have eventually provided Israel with approximately 10 percent of its annual energy requirement, and would have generated approximately $1 billion for the PIF. The Hamas election victory in 2006 put all that in jeopardy.....

In January, BG announced it was pulling the plug on negotiations with Israel due to the long impasse, and was again considering Egypt as a buyer. The Egyptian option includes liquefying up to a third of the gas for export to the US and Europe. BG announced plans to close its office near Tel Aviv at the end of January and sell its share in Israel's offshore Med Yavne natural gas field. Since the announcement, Israel has radically expanded its sanctions, cut fuel shipments entirely and stepped up its military campaign......"

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