Israeli company agrees to supply natural gas to the Gaza Strip

What happened: The Qatari envoy to the Gaza Strip, Mohammed al-Emadi, yesterday announced a plan to supply natural gas from Israel’s off-shore reserves in the Eastern Mediterranean to the power station in the Gaza Strip.

  • According to the Qatari envoy, there are two contracts: The first one is between the Palestinian Authority (PA) and the Israeli gas company Delek for the purchase of the natural gas; the second contract relates to the installation of the pipelines.
  • Al-Emadi told Arab media: “An agreement has been reached with Europe to allocate $5 million dollars for the assembly of gas pipelines from the border to the power station, while Qatar will install pipes on the Israeli side.”
  • The agreement was reached after negotiations with the PA, Israel’s Delek gas company, representatives of the Quartet on the Middle East, and other European diplomats.
  • Separately, Prime Minister Netanyahu hosted Cyprus President Nicos Anastasiades in Jerusalem yesterday.  Among the issues on their agenda was their continued cooperation in the energy sector.  Netanyahu said, “We will continue to work on the East-Med pipeline. I mentioned the fact that this visit comes in the heels of the visit of the prime minister of Greece, and it’s a fact that we have built not only a bilateral alliance, but a trilateral alliance, which I think is good for the region, good for our countries, I think it’s good for the world … we already see this through the involvement of Arab countries in the East-Med Gas Forum. They’re coming to our gas cooperation, and that’s a sign of the future. I think this is only just the beginning.”

Context: The Gaza gas plan hopes to alleviate the economic and humanitarian situation in Strip, which suffers from limited power supply and growing demand.

  • The Gaza Strip only has a single power plant and is dependent on diesel from the Israel Electric Corporation as well as Egypt for most of its power. In the past, as part of its dispute with Hamas, the PA have refused to pay for the diesel supply to Gaza.
  • The plan to convert from diesel to natural gas will save the PA millions of dollars. The PA currently pays $11 million for a power line from Israel, in addition to the $2.5 million for the power station. Qatar buys $7 million in fuel every month for the power station in Gaza.
  • Gazans live on 11 hours of electricity a day, up from the four to six hours of electricity they received a few years ago.
  • Earlier this year, the Qatari government agreed to provide $360 million in financial assistance for the Gaza Strip during 2021. Within this, they provide $10 million to needy families and another $10 million for the salaries of Hamas employees.
  • In addition, Qatar is committed to buying diesel for the power station and support humanitarian projects, such as a new hospital in Rafah and a dialysis institute.
  • Al-Emadi plays a crucial role in shuttle diplomacy travelling between the Gaza Strip, Ramallah and meeting Israeli officials. There is speculation that as Israel and Qatar continue to cooperate, this could lead to normalisation between the two countries.
  • There is also hope that the pipeline could help Israel and Hamas reach an understanding for a long-term ceasefire arrangement.

Looking ahead: This would be a major infrastructure project, that is expected to take a couple of years to be completed.

  • The plan now is to set up a team of officials from the reconstruction committee and the PA to monitor the implementation of both contracts within the next six months.
  • They will need a separate plan to convert the power station from diesel to natural gas.

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