BG Group PLC said discussions with Israel on the country's possible purchase of Palestinian gas discovered off the shores of the troubled Gaza Strip continue.
"Progress continues with the negotiations. There are commercial issues to be resolved," said a spokesman at BG, which discovered the Gaza Marine field, believed to be holding 1 trillion cubic feet of gas.
He played down a press report claiming the group is close to securing a 15-year gas supply contract with Israel worth up to US$4 billion.
"A final deal absolutely depends on the bilateral engagements between the Israeli government and the Palestinian Authority. That's a matter for them, not for BG," he stressed.
The Times newspaper today reported BG executives are meeting Israeli government officials next week to work out the terms of the gas contract.
Gaza Marine is capable of supplying 10 percent of Israel's annual energy requirements, the article said, adding that the Palestinian Authority could earn revenues of up to US$1 billion over the term of the deal.
However, there are major issues to be sorted out, including how Israel will pay for the gas. Israeli defense officials want payments to be made in goods and services and insist no money go to the Palestinians' Hamas-controlled government, the newspaper said.
(AFX News, 23/05/2007)