The Palestinians are seeking to sell a 45% stake in a gas field off Gaza to help to develop the project, its main stakeholder, the Palestine Investment Fund, said on Wednesday after Royal Dutch Shell announced it had pulled out.
The Gaza Marine project, about 30 kilometers (20 miles) off the Gaza coast, has long been seen as an opportunity for the cash-strapped Palestinian Authority to join the Mediterranean gas bonanza, providing a major source of income to reduce its reliance on foreign aid. But Palestinian political disputes and conflict with Israel, as well as economic factors, have delayed plans to develop the field, and Shell had struggled to find a buyer for its 55% stake in the field, which it took over as part of its acquisition of BG Group in 2016.
Shell said on Wednesday it had reached an agreement with the Palestine Investment Fund to divest its interest in Gaza Marine. The PIF, a sovereign wealth fund, said that under a new structure agreed upon with the Palestinian Authority, the PIF and its investment partner, CC Oil and Gas, would each hold 27.5% of development rights, and a future foreign operator would have 45%. The PIF said the new structure would give momentum to “one of Palestine’s most vital, strategic assets,” fuel power plants in Gaza and the city of Jenin in the West Bank, and enable the Palestinians to become an energy exporter.
Gaza Marine is estimated to hold over 1 trillion cubic feet of natural gas, the equivalent of Spain’s consumption in 2016. But plans to develop it were put off several times over the past decade. Discovered at the end of the last century, it lies between two rapidly expanding gas hubs in Egypt and Israel, both of which have attracted huge investments in recent years.