Exclusive: Israel-BG deal 'imminent,' official says

The long awaited multi-billion dollar deal with the British energy company BG Group will be signed "imminently," a high-ranking official in the National Infrastructure Ministry said on Wednesday.

By MATTHEW KRIEGER
July 19, 2007 06:35
2 minute read.
Exclusive: Israel-BG deal 'imminent,' official says

british gas 88. (photo credit: )

 
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The long awaited multi-billion dollar deal with the British energy company BG Group will be signed "imminently," a high-ranking official in the National Infrastructure Ministry told The Jerusalem Post on Wednesday. "In this deal there are two chief negotiators - Hezi Kugler, the director-general of the Infrastructure Ministry and Yarom Ariav, director-general of the Finance Ministry, and believe me when I tell you that the deal, in principle, is really almost done," the official told The Jerusalem Post. He also dispelled any rumors about the possible breakup of the deal stemming from stalled negotiations between Israel and BG over the price of the gas and said in an interview with the Post that Kugler met earlier this week with BG Vice President Nigel Shaw and the two made "great strides" towards finalizing the last components of the deal. "Right now we are at the point where we are ready to sign a deal in principle, which is the first stage of the agreement, and then we will be ready to start talking about the legalities involved," he said. The official pointed that a "deal in principle" includes agreeing to how much gas would be sold to Israel, at what price and for how many years. According to an article that appeared in Globes on Tuesday, BG sources said the company would only allow for a few more months of negotiations over the price at which the gas would be sold and if there was no deal would revert to an earlier plan of selling the estimated 1 trillion cubic feet of natural gas to Egypt. A BG spokesman did confirmed the report to the Post, saying that "while BG wants to sell the gas to Israel, if we can't make any progress, we will sell the gas to Egypt." The Infrastructure official, nevertheless, stood by his comments as a representative of the Israeli government but said he could not speak for BG. The gas under discussion is located off the coast of the Gaza Strip in the Gaza Marine field and has been said to be worth some $4 billion, a number that likely will depending on the final price agreed upon by Israel and BG. Israel began talks with BG in February 2006 and said in May of that year that it expected to buy 1.5 billion cubic meters of gas from BG annually starting in 2009. Soon after, BG broke off talks with Israel and said that it preferred bringing gas to Egypt to be liquefied and then shipped by tankers to the US, Europe and the Far East. Talks resumed in July 2006, and in April of this year the cabinet voted 21-to-three to grant a negotiating team formal permission to hold talks with BG on the purchase of gas from the Gaza Marine field. Located about 50 kilometers off the Gaza Strip coast, control of the Gaza Marine field was given to the PA following the Oslo Accords. BG acquired the rights to drill for gas in the field about eight years ago, however, the terms of agreement by which they acquired the field are unknown. "BG is an upstanding company and despite the fact that we don't know exactly how it was acquired, we trust that they did everything correct," said the ministry official.

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