Gaza Marine

Location and Geology

The Gaza Marine gas field is situated approximately 30-35 kilometers off the coast of the Gaza Strip in the eastern Mediterranean Sea. It lies at a water depth of around 603 meters. The field is part of the Levant Basin, a region known for its substantial hydrocarbon reserves, including an estimated 1.7 billion barrels of oil and 122 trillion cubic feet of natural gas.

Discovery and Reserves

The Gaza Marine gas field was discovered in 1999 by British Gas (BG) using 3D seismic technology. Two exploration wells, Gaza Marine-1 (GM-1) and Gaza Marine-2 (GM-2), confirmed commercially viable gas reserves. The field is estimated to contain around 1 trillion cubic feet of gas, with a projected life span of 15 years.

Ownership and Licensing

The Palestinian National Authority awarded BG a 25-year exploration license for the entire marine area offshore Gaza in 1999. Initially, BG held a 90% interest in the field, but this was set to reduce to 60% if the Palestinian Investment Fund (PIF) and Consolidated Contractors Company (CCC) exercised their options, resulting in PIF and CCC holding 30% and 10% interests, respectively. Following Shell's acquisition of BG, the interests were adjusted, with CC Oil & Gas and the Palestinian Investment Fund acquiring Shell’s interest, each holding 50% in some reports.

Development Challenges

The development of the Gaza Marine gas field has been significantly hindered by disputes between Israel and the Palestinians. Key issues include:

• Territorial Disputes: Under international law, the area containing the gas field belongs to the Palestinians, but Israeli resistance and political complications have hindered development.
• Pricing and Supply Agreements: Initial agreements required surplus gas to be supplied to Israel, but Israel was reluctant to pay market prices, leading to a deadlock in negotiations.
• Security Concerns: Israel has expressed concerns that revenues from the gas field could be used to fund terrorism, further complicating the development process.

Proposed Development Plan

The proposed development plan includes a sub-sea development and a dedicated pipeline to transport the natural gas to an onshore processing terminal. The project is expected to take three to four years to complete once it begins.

Recent Developments and Agreements

Recent efforts have seen some progress:

• Preliminary Approval: Israel has given preliminary approval for the development of the Gaza Marine gas field, facilitated by mediation efforts from Egypt and Jordan. This approval is part of a broader effort to de-escalate tensions and build cooperation between Palestinians and Israelis.
• Egyptian Involvement: The Egyptian Natural Gas Holding Company (EGAS) is set to develop the field and related infrastructure under a Memorandum of Understanding (MoU) signed in 2021. The plan involves transporting Palestinian gas through a pipeline to Egyptian LNG facilities for liquefaction and consumption by Palestinians, Egyptians, and other markets.
• Phased Development: The development is expected to proceed in three phases: extraction from Gaza Marine-1, construction of the pipeline, and development of Gaza Marine-2.

Economic and Environmental Benefits

The development of the Gaza Marine gas field is expected to bring significant economic, environmental, and energy security benefits:

• Revenue Generation: The project is estimated to generate around $2.4 billion to $2.5 billion in royalties and taxes over its 15-year life span.
• Energy Self-Sufficiency: It will enable the Palestinians to replace diesel with natural gas for electricity generation, reducing costs and improving environmental conditions.
• Reduced Dependence on Imports: The project will help Gaza reduce its dependence on imported energy, particularly from Israel.

Regional Implications

The development of the Gaza Marine gas field has broader regional implications:

• Israel's Energy Security: The field could supply around 10% of Israel's energy requirements, reducing its dependence on Egyptian gas and enhancing its energy security.
• Regional Cooperation: The project involves cooperation between Egypt, Jordan, and other regional players, potentially fostering greater interdependence and stability in the region.

In summary, the Gaza Marine gas field represents a significant energy resource with the potential to transform the economic and energy landscape of the Gaza Strip and the broader region. However, its development remains fraught with geopolitical challenges and complexities.