by Fares Akram
GAZA, June 3 (Xinhua) -- Under Gaza's glittering waters of the Mediterranean, a strategic gas reservoir that is capable of ending the crippling power crisis in this Palestinian enclave has been lying out of commission since it was discovered 12 years ago.
Now, electricity outage in Gaza is suffered up to 12 hours per day, as the only power plant lacks enough diesel to run its turbines. Cars stop in long queues for hours at petrol stations, hospitals warning that fuel for generators is running up and cooking gas suffers sporadic shortages.
In 2000, the U.K.-based energy firm BG Group plc and its partners -- the Lebanese Consolidated Contractors Company (CCC) and the Palestinian National Authority (PNA)'s Investment Fund -- announced the discovery of a gas field 36 km off the Gaza coast. Later in the year, the consortium said it drilled two wells (Gaza Marine-1 and Gaza Marine-2), with estimated resources of around 1 trillion cubic feet.
"There are no real obstacles preventing us from extracting the gas," said a source from BG group. "The only problem is that we are still searching for a market." The source says that despite talking to several regional and foreign potential buyers, no agreement was reached. No explanation for this was offered from the source.
Ghassan Al-Khatib, spokesperson for the PNA, said there are other "considerations need to be overcome," including political factors involving Israel. "It is difficult to limit the hindrances into one obstacle."
BG Group spent seven years in negotiations with Israel as a possible purchaser of Gaza gas, but the negotiations stopped in 2007 and the company closed its Tel Aviv office. Sources from the company say Israel wanted to get the gas for two U.S. dollars per cubic feet, below the market's seven-dollar price.
Also in 2007, Islamic Hamas movement wrested control of the Gaza Strip, leaving the PNA's rule confined to the West Bank. As Al-Khatib and the BG Group source downplayed the partial responsibility of the Palestinian split for not extracting gas, another BG Group source did not. "If there was no split, the gas field might have been developed."
In May this year, Hamas and Fatah made steps toward unity and reconciliation. According to their deals, a government ruling Gaza and the West Bank should be formed in June. This development should lead to progress on Gaza gas project, the sources say.
Dr. Mouin Rajab, a professor of economy in Gaza's Al-Azhar University, say that the consortium should look for other markets than Israel. "It's not compulsory to sell the gas for one certain side. Being on eastern coast of the Mediterranean, the gas can reach Europe via underwater pipelines."
If the gas was flowing, the Gaza power plant would have been running on full capacity, as the BG Group sources say it was designated to run on gas, but the lack in this material forced the owner of the station to operate it on industrial diesel.
As part of the Israeli sanctions against Hamas, shipments of diesel to the station from Israel were limited. For a year, Hamas managed to smuggle the fuel from Egypt, but the process was interrupted by the beginning of 2012.
According to Palestine Investment Fund, one of the partners in Gaza Marine project, the gas is enough to meet the needs of the Palestinians for 15 years, establish two new power plants in the West Bank and save the Palestinian treasury hundreds of millions of dollars paid annually for purchasing electricity from Israel.
"This gas will be important when it is extracted because the Palestinians are in dire need for such revenues, given the severe financial crisis," the PNA spokesperson Al-Khatib said.
When the search for gas began in late 1990s, Israel and the Palestinians were on the brink of reaching a final peace deal and this project was perceived as one that would shape the identity of the Palestinian state.
Now, 12 years after the outbreak of the second Palestinian Intifada (uprising), Gazans have become preoccupied with their day to day life concerns, barely finding time to think about the gas project. An example of the complexities of the Palestinian scene can be clearly found in a shipment of diesel donated by Qatar to Gaza. It has taken Israel, Egypt, Hamas and the PNA more than a month of negotiations until they agreed on how to deliver the Qatari diesel to Gaza's power plant next week.
Observers believe that Israel's monopoly on the Palestinian energy resources aim at preventing any unilateral step of independence by the Palestinian leadership.
"And when the power plant is running on gas, we would be able to use the steam from its third turbine in desalinating seawater," the BG Group official says of the future.
Special Report: Palestine-Israel Conflicts