Gaza Marine Development Could Help Deliver Israeli Security

Investment in energy infrastructure in the Palestinian territories, including the Gaza Marine gas field, would be good for Israel's security and the country's wider relations with the Arab world, according to a speech made at last week's Universal Oil & Gas 2014 conference at Israel's Dead Sea Resort.

Speaking on the last day of the conference, Ariel Ezrahi, an energy infrastructure adviser at the Office of the Quartet Representative Tony Blair, said that the Palestinian-controlled Gaza Marine gas field could "have a massive impact in transforming the energy sector in Palestinian territories both in terms of energy resource and in terms of boosting the [Palestinian] economy across various sectors. This field has not yet been developed… but I'm hoping that in the coming weeks and months we'll see some significant changes here."

The Gaza Marine field contains an estimated one trillion cubic feet of gas. Lying some 20 miles off the coast of the Gaza Strip, the field was discovered after BG Group drilled two wells after being awarded an exploration license by the Palestinian Authority in 1999.

Ezrahi noted that the development of Gaza Marine, along with other potential hydrocarbon resources that may exist in Palestinian areas, could play a crucial role in helping the Palestinian territories generate the supply required to meet their electricity needs.

"If you look at the West Bank there is at the moment no power generation capacity whatsoever… The electricity usage is about 860 megawatts and the [demand] estimated in 2020 is closer to 1,300 megawatts," Ezrahi said.

"In Gaza the situation is far worse. You've got significant daily electricity outages, which has become more since the 2014 conflict. The electricity supply oscillates between 150 megawatts to roughly 210 megawatts… depending on the situation at the Gaza Power Plant. The Gaza Power Plant is the only power-generation facility in the entire Palestinian territories.

"We estimate the current needs being around 410 megawatts, so you can see that the deficit there is significant… We estimate that by 2020 there will be 855 megawatts that will be required."

All of this means that there are energy opportunities for investors willing to enter the Palestinian market. 

"This is a developing economy, a developing market, so there are many opportunities in the energy sphere not just for the governments involved but also very much the private sector," Ezrahi said.

The energy industry's involvement in the region has a potential role in helping to bring peace to both Israel and the Palestinian areas, according to Ezrahi.

"There is a lot of room for cooperation in the energy sphere between Palestinian actors and Israel and other regional counterparts. I think it's a very exciting time and that the energy hopefully can be used as a lever to overcome some of the political constraints because it would be in everyone's interest," he said, explaining that having an interconnection between Palestinian gas and electricity would be good for Israel's security and its relations with the wider Arab world.

"It would be good for the Palestinians but it would also be good for Israel and, in fact, it would have broader connections to the region. Israel is not connected to the Arab electricity grid and it is not connected to the Arab gas pipeline. Once again, the Palestinian angle could be very useful."