Gas to Gaza? The pipeline that might provide a lifeline

By Ari Rabinovitch and Nidal al-Mughrabi
JERUSALEM (Reuters) - Talks about a gas pipeline that would cross political fault lines and provide reliable power to impoverished Gaza Strip have moved from abstract to concrete in recent weeks, three officials with knowledge of the process told Reuters.
For years the project was a distant prospect due to the Israeli-Palestinian conflict - the peace talks between the two sides were broken off in 2014 and never resumed despite mutual suspicions and outbreaks of violence.
But Israeli, Palestinian, Qatari and European interests have grown together in recent weeks to flow gas to Gaza in 2023, officials say.
The plan calls for natural gas from Chevron's deep-water leviathan field operated in the eastern Mediterranean to flow through an existing pipeline to Israel and from there through a planned new expansion to Gaza.
Under the agreement, which has not yet been finalized, the Israeli side of the proposed pipeline would be funded from Qatar and the Gaza section paid for by the European Union, officials told Reuters.
If successful, the pipeline project would provide a steady source of energy to the Gaza Strip for the first time in years, ending rolling power outages that have helped cripple the economy of the blocked Palestinian enclave.
"We talk about Gaza having 24-hour electricity, providing a foundation for significant economic growth and contributing to peace and stability," said Ariel Ezrahi, energy director for the Quartet's office, a group that promotes peace efforts between the Palestinians and Israelis. reporting to the United States, the United Nations, the European Union and Russia.
"The recent events were a real breakthrough," said Ezrahi, chairman of the Gas for Gaza Task Force, which has been funded by the Dutch government since 2015.
At the Quartet's office, the Palestinians will initially buy around 0.2 billion cubic meters (BCM) of gas per year and potentially rise to 1 BCM as the facility expands and other consumers join.
Last week the European Union initially pledged € 5 million to finance the Gaza section of the pipeline, which will be around 4 km long and cost around € 20 million.
Qatari envoy for the Gaza Strip, Mohammed Al-Emadi, told Gaza-based SAWA news agency last week that his country would fund the Israeli segment of the pipeline, which official figures say will be around 45 km long and cost around 70 million euros.
Palestinian and Israeli officials told Reuters that Qatar was ready to pay for the pipeline in Israel. The Emadi office and the Qatar government press office did not respond to requests from Reuters.
Israel's Leviathan field is already exporting gas to neighboring Jordan and Egypt.
When asked about the Gaza pipeline, Chevron said he looked forward to "supporting Israel's strategy to develop its energy resources for the benefit of the country and the region" but did not say "on issues of a commercial nature."
The main Israeli partner in Leviathan, Delek Drilling, declined to comment.
Gaza, home to two million Palestinians, is a 360 km² coastal enclave between the Egyptian Sinai Peninsula and Tel Aviv.
It has no access to the outside world except through Israel, which controls 90% of its land and sea borders, and Egypt, which has a narrow land border in the south.
Both countries have maintained a strict blockade for years and cited security concerns about the militant Islamist group Hamas, which took control of Gaza in 2007.
Today the only power station in Gaza produces electricity for around 12 hours a day using diesel, a more expensive and environmentally harmful fuel.
The pipeline will enable the power plant to double, possibly quadruple its generating capacity. The Quartet office estimates it will add more than $ 1 billion to the Palestinian gross domestic product.
While a cheaper and more reliable source of energy could ease Gazans' economic plight and thus contribute to stability in the region, few expect it to be a panacea.
Indeed, by the end of the planned pipeline, the power plant has already proven to be politically vulnerable.
It was bombed by Israel in 2006 after Hamas militants from Gaza captured an Israeli soldier in a cross-border raid.
And for the past decade, both sides have accused each other of exacerbating the power crisis in a bitter feud between Hamas and its main rival, President Mahmoud Abbas.
Abbas' Western-backed Palestinian Authority will hold final talks with the Israeli gas company, Palestinian officials said.
Walid Salman, vice chairman of the Palestine Electric Company (PEC), said he hoped an agreement could be reached in weeks - this could cut electricity costs by 60% and double generation to a maximum of 140 megawatts.
He said they spoke to Delek about a 5 year gas contract.
In Israel, Energy Minister Yuval Steinitz said the project would be carried out "in full coordination with us".
These include the defense company and the state-owned Israel National Gas Lines, whose CEO said plans for a 24-inch pipeline capable of carrying "significant amounts of gas" are ready.
They are waiting for a final deal, maybe in the coming weeks, to start building.
(Nidal al-Mughrabi reports from Gaza; additional reporting by Ghaida Ghantous and Rami Ayyub; editing by Stephen Farrell and Mike Collett-White)
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