Maiman: Martin Schlaff, Muhammad Rashid Secretly Own Stakes in BG Gas Partnership

Energy baron claims he offered to sell Israel the same amount of gas that BG's considering, for less money

Austrian Jewish mogul Martin Schlaff and Palestinian businessman Muhammad Rashid secretly hold shares in British Gas' natural gas partnership, EMG co-owner Joseph Maiman claims.

Maiman owns a stake in EMG, an Egyptian-Israeli partnership and rival supplier of natural gas to Israel.

Rashid was a close economic advisor of the late Yasser Arafat, and owns several monopolies in Gaza. He is well connected with both Palestinian and Israeli politicians. Schlaff is known for advancing relations between Israel and Austria, and also for being suspected of bribing Arik Sharon. In 1998 he and a company affiliated with Arafat opened a casino in Jericho, which attracted a huge amount of Israeli business.

Maiman issued his rare comment ahead of the cabinet meeting today, at which the ministers are expected to advance a deal to buy natural gas from BG.

At present the state is forbidden to buy or sell natural gas. The cabinet will be discussing a proposal to annul this ban, with the aim of expanding Israel's sources of gas beyond EMG and the Tethys Sea consortium, which has almost exhausted its supply.

A month ago the proposal arose but failed, after Defense Minister Amir Peretz, Fg Minister Tzipi Livni and Strategic Affairs Minister Avigdor Liberman balked. At the time, Prime Minister Ehud Olmert ordered fresh reviews for another debate on the proposal. Today the cabinet will be addressing a revised version of the proposal, that adds a representative of the Foreign Ministry to the negotiating team.

Maiman said that two months ago, he told the team that he was offering to sell Israel the same amount of gas being discussed with BG, and at a much lower price. But he never received a response from the interministerial team, he says.

"I can't understand the thought process guiding the Prime Minister's Office ? not its preference for British Gas over other suppliers, nor the urgency and secrecy of its attention," Maiman commented yesterday.
BG owns 90% of the Palestinians' gas field off the Gaza shores. It is estimated to contain 35 billion cubic meters of natural gas. If the field is developed, BG's holdings would be diluted to 60% and the Lebanese cy CCC would own 30%. The Palestinian Authority would own 10%.

Israel hopes to buy the reserve and boost competition with EMG, currently the country's largest supplier. Maiman holds a 25 percent stake in the company.

Maiman revealed that three years ago, BG talked with him about joining the Palestinian gas project. At the time he says, BG's overt partner, the Lebanese company CCC, revealed to him that some shares in the project were held in trust for confidential partners.

"It turned out these included Rashid and Schlaff - based on this we decided to withdraw from the deal," says Maiman. He raised concerns that some of the funds reaching the confidential partners could indirectly end up in the hands of Hamas.