BG nixes plans to sell Israel natural gas

The $4 billion worth of natural gas that BG Group Plc controls off the Gaza Strip coast will not be sold to Israel as the company officially ended negotiations on Thursday, citing insurmountable differences on several key issues.

“We came to a point where we had not been making any progress and it was clear that we were not going to close the differences that we had regarding key issues,” a high-ranking BG official told The Jerusalem Post. “We have been negotiating throughout the fall and the issues of price, the amount of gas to be supplied to the Gaza Strip and a funds flow arrangement with the Palestinian Authority had not gotten any closer to being solved.”


The estimated 1 trillion cubic meters of gas is located approximately 36 kilometers off of the Gaza coast, in an area that was designated as PA territory following the Oslo Accords. The British energy giant purchased the rights to the field in 2000.

According to the original bilateral arrangement between Israel and the PA, some 60 percent of the revenues from the sale of the gas would have gone to BG; 30% to BG’s partner in the deal, the British energy company CCC; and 10% of the revenue, estimated to be worth hundreds of millions of dollars a year, was to be designated for the PA’s Palestinian Investment Fund, under the auspices of the office of Palestinian Authority President Mahmoud Abbas.

Jerusalem Post