The Gas Fields Off Gaza: A Gift Or A Curse?

al-shabaka
the palestinian policy network
www.al-shabaka.org
Al-Shabaka Policy Brief

April 2012

Overview

Thirteen years after the discovery of gas fields off the coast of Gaza, efforts to develop them remain deadlocked despite the international backing the project enjoys. Meanwhile the besieged Gaza Strip suffers prolonged power cuts and the Palestinian economy bears a huge financial cost - as do the Western taxpayers keeping it afloat. Al-Shabaka Program Director Victor Kattan discusses the actors and amounts involved as well as the reasons why the project has stalled and recommends some policy options to break the deadlock. A Resource Out of Reach The Palestine Electricity Company and the Egyptian General Petroleum Corporation recently concluded an agreement to import Egyptian gas across the Rafah border. In time, this agreement could bring relief to the residents of the Gaza Strip who have been plagued by chronic fuel shortages with power outages of up to 18 hours a day. The gas could also benefit the Palestinians of the West Bank whose electricity is imported from Israel at high prices. But why does the Palestinian Authority even need to purchase and import gas from Israel and Egypt at considerable expense when two gas fields remain undeveloped off the Gaza coast?

The question is pertinent because there has been an agreement for 13 years between Consolidated Contractors Limited (CCC), the British Gas Group (BG Group) and the Palestine Investment Fund (PIF) to develop and commercialize the Gaza fields. In 2000 and 2002, the development studies undertaken by BG Group concluded that the fields were economically feasible. In other words, Gaza, rather than being one of the poorest places on earth, could be one of its richest, if only the development and commercialization of this precious natural resource off its own coast could be given the go-ahead. Moreover, the gas would benefit the Palestinian people as a whole. For example, West Bank

Read the full Policy Brief here: Al-Shabaka_PolicyBrief_Eng_April_2012.pdf

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