Egypt, Israel and PA are close to agreeing on Gaza’s offshore gas production

by | Oct 20, 2022 | Politics | 0 comments

Israel, the Palestinian Authority, and Egypt are in the middle of negotiations in order to finally restart the development of the Marine gas fields located offshore from Gaza, according to PA sources and to reports circulating by various media outlets.

The Gaza gas fields were originally discovered in 1999 thirty six kilometres off the shore and one is known as Gaza Marine 1. It is thought to contain 33 billion cubic meters of natural gas. The second field, known as Gaza Marine 2, is situated on the maritime border between Gaza and Israel and has an extra three billion cubic meters of space.

Back at the time, a 25-year agreement for field development was signed by the British Gas Group (BG Group), the CCC, and the Palestinian Investment Fund. However, in 2016, BG Group withdrew from the project and gave it to Shell, who, due to a number of disagreements, had to withdraw from it as well in 2018.

Less than two years ago, in February 2021, a memorandum of understanding (MoU) for the development of the Marine offshore field was signed by the Egyptian government and the PA. Both parties agreed to work together on the development of the gas field, a pipeline to the Gaza Strip, and liquefaction facilities in Egypt. Therefore, now Egypt is very eager to mediate an agreement with Israel in order to potentially release the untapped content of the gas field. This is especially relevant at this point when sanctions against Russia and its weaponisation of energy commodities resulted in shortages of global energy resources. A successful outcome will reduce Gaza’s dependence on imported diesel and create thousands of job opportunities for local residents.

The agreement is not impossible but will be riddled with challenges due to this region’s volatile geopolitical environment. One of them is uncertainty surrounding the economic waters where the gas field is situated. Although the Palestinian Authority was granted permission in 2000 by then PM Ehud Barak to drill for gas and use revenue from its sale, Israel has not legally ceded its claims to the area. Therefore, for the process to go ahead, an agreement amongst all the parties involved would be required in order to legally guarantee the status and security of the field.

If a maritime border agreement with Lebanon is any indication in terms of putting pressure on Hezbollah, the potential agreement between Israel, Egypt and PA would have some level of leverage over Hamas as they will have to think twice before deciding whether to get involved in a military conflict with Israel. Once this is a done deal, they will have a vested interest in the form of the revenue generated through gas extraction that they would not want to lose. Therefore, Israel has every reason to ensure that this issue is resolved sooner rather than later as all parties involved would benefit immensely one way or another.


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