Foes come together to exploit Gaza’s gas

Europe’s race to secure alternatives to Russian energy supplies is reviving a long-forsaken Palestinian initiative to extract natural gas off the coast of the blockaded Gaza Strip.

Palestinian officials say rapidly advancing negotiations with Egyptian investors could bring a rare glimmer of hope to their people, with plans to develop Gaza’s gas – along with plans for the creation of a Palestinian state – sidelined by more than two decades of grinding conflict with Israel and equally intractable Palestinian political divisions.

The US$1.4 billion (NZ$2.24b) project, which will be finalised by February and may begin production by March 2024, will be a high-stakes collaboration among the Palestinian Authority, Egypt, Israel, and Hamas, the Islamist militant group that rules the Gaza Strip. Hamas and Israel have fought four devastating wars in Gaza.

The project will also, industry and political analysts say, throw a lifeline to the cash-strapped and deeply unpopular Palestinian Authority, which is based in the West Bank and has for 15 years held no authority in Gaza.

Since they were discovered by British Gas in 1999, Gaza’s two offshore natural gas fields – estimated to total 28 billion m3 – have been mired in the IsraeliPalestinian conflict.

In 2000, a day after Palestinian nationalist leader Yasser Arafat hailed the discovery as a ‘‘a gift from God’’, the second intifada erupted. Then-Israeli Prime Minister Ariel Sharon halted the project, warning that the profits could be channelled to Hamas and other militant groups.

In October, Egypt announced a framework agreement between the Egyptian and Palestinian sides, with close oversight and unofficial consent by Israel.

According to the deal, the gas will be developed in Palestinian waters, then transferred via a 65km undersea pipeline to Egyptian processing facilities.

Gas would also bring Palestinians closer to energy independence from Israel. The West Bank imports 750 megawatts of its total 850mW consumption, while Gaza relies on Israeli electricity, as well as Israeli fuel for its power plant.