An intriguing story in Haaretz today reports that Israeli and Egyptian representatives have “agreed in principle Wednesday to a deal that would have Egypt replace Israel as the Gaza Strip’s sole electricity provider”. The story also states that “Israeli security sources said the infrastructure minister and the Defense Ministry have been in talks with Egypt for a long time. The deal won the approval of Defense Minister Ehud Barak, who is interested in severing ties with Gaza”.
There is nobody who wouldn’t be pleased by such a deal.
Contacted by this reporter, a spokesperson for the Ministry of National Infrastructure, said Thursday morning that he had tried to check the Haaretz report but so far “We don’t know anything about it” – though, he added, the Haaretz journalists who wrote the story are good reporters.
But, as the Israeli spokesperson confirmed, the deal is actually between Egypt and the Palestinian Authority.
This deal was reported in a story published by this reporter in December (see UN Truth on 8 December here ).
It is not clear what role, if any, Israel would have in the deal – though the Israeli government would clearly like to be kept informed.
Dr. Omar Kittaneh, head of the Palestinian Energy Authority in Ramallah, told this reporter in early December that Egypt has agreed to build new lines with a capacity to carry up to 300 MW of electricity. “We’re expecting the line to be in operation at the beginning of 2009?, he said.
This could theoretically be enough to supply all the electricity needs of the Gaza Strip — though, Dr. Kittaneh noted carefully, “there are no commitments yet about the amount of electricity that will be supplied, only about the line capacity”.
Dr. Kittaneh was in meetings in Cairo on Thursday.
The Haaretz story today says that “Under the deal, Egypt would set up a new power line from the Sinai Peninsula town of Arish to the nearby Gaza Strip. The 150-megawatt line would cost $35 million to set up, and would be operational within two years”.
If that is the case, Egypt will not be supplying all of Gaza’s electricity – for the present demand in the Gaza Strip is for some 240 MW of electricity per day.
But, because of the Israeli fuel sanctions imposed on the Gaza Strip on 28 October, and electricity cuts that went into effect on 7 February, Gaza has been getting something like 20% percent less than that – or, not more than 200 MW on a good day.
However, it now appears the Israeli military-ordered electricity cuts, which were approved by the Israeli Supreme Court on 27 January, and went into effect on 7 February, were a bad idea. The electricity cuts appear to have been rescinded.
In fact, Israel now appears to be providing more electricity to Gaza than previously, rather than less.
Peter Lerner, the spokesperson for COGAT (Coordination of [Israeli] Government Affairs in the Territories), told this reporter Thursday that Israel is now supplying 124 MW of electricity per day to the Gaza Strip.
Before the cuts, Israel was supposedly providing 114 MW per day to Gaza, but technical problems and “local error” – not discovered until the Israeli Supreme Court had asked the military to provide clear information – had lowered that amount.
Gaza’s own power plant is providing about 55 MW of electricity per day. Egypt currently supplies 17 MW of electricity through one direct feed line from Rafah in the Sinai to the Rafah District in Gaza.
Egypt cannot offer an immediate solution to Gaza’s electricity problem – it cannot increase the amount of electricity it provides at the moment, as the line capacity is full. And, it will take at least one year to build the new line to Gaza, once the contracts are approved.
Dr. Kittaneh indicated in December that tenders will be issued soon for the Egyptian line to Gaza. He said that the cost will be paid by a $32 million dollar grant from the Islamic Development Bank in Jeddah, Saudi Arabia.
These lines will not be simple feeder lines, which send electricity in only one direction, Dr. Kittaneh explained. They will be two-way lines capable of transmitting electricity in either direction over interconnected grids. “Interconnectivity is the modern policy choice being made by every country in the world now”, Dr. Kittaneh added.
An eventual connection from the West Bank to the Jordanian grid has also been approved, Dr. Kittaneh indicated.
These decisions were approved by all seven countries who are part of an interlinked grid of seven regional electric authorities (Egypt, Jordan, Syria, Lebanon , Libya , Iraq and Turkey), at a meeting of Arab League Ministers of Electricity last March — soon after the formation of the “National Unity” Palestinian Authority Government following Saudi mediation between Fatah and Hamas.
The Palestinian Authority recently presented a five-year Master Plan for reviving the Palestinian infrastructure and economy to a post-Annapolis meeting of donors in Paris in December, and it included a request for some $200 million to develop the electricity sector, according to Dr. Kittaneh.
The Gaza power plant, still under Israeli military-applied Phase I fuel sanctions, is currently receiving only 2.2 million liters of industrial diesel fuel a week, enough to providing between 45-65 MW of electricity per day over seven days to Gaza City and Central Gaza.
The Gaza power plant, originally built to produce 140 MW per day, is now capable of generating 80 MW of electricity, if only it had enough fuel.
It was destroyed in a June 2006 IDF bombing after the abduction of Corporal Gilad Shalit from near Kerem Shalom. Corporal Shalit is still being held somewhere in Gaza.
Even if Gaza’s power plant were operating only at its present full capacity of 80 MW, it could, together with the reported future expected Egyptian supply of 150 MW (half of the proposed Egyptian line’s capacity), meet the total present electricity demand of the 1.5 million inhabitants of the Gaza Strip.
But, so long as the Gaza power plant must operate with the Israeli-supplied industrial diesel fuel needed to operate, Gaza will remain dependent on Israel for a substantial portion of its electricity.
One option for Gaza to “disengage” from Israel would be to convert the Gaza power plant operation from diesel fuel to natural gas – and to buy gas from Egypt, pending development of Gaza’s own offshore gas discoveries. This option was included in a World Bank report on Palestinian energy that was published last May.
An Egypt-Gaza pipeline could be in place by 2009, the World Bank said.
(The construction of a pipeline returning from Ashkelon to Gaza – see scenario below –
could take about the same amount of time – but would depend on a drastically different political environment.)
Converting the Gaza Power Plant operation from diesel fuel to natural gas would save a lot of money – over $45 million dollars per year at its present reduced level of operation, and almost double that amount if it were to operate at full capacity.
Initially, it was planned that Gaza’s own offshore natural gas discoveries were supposed to help fuel the Power Plant – but negotiations concerning exploitation and marketing of this gas have been complicated, and they have recently been put on hold.
Even in a best-case scenario, that Palestinian offshore gas would now not be available before 2011 at the very earliest.
In the past month, liquid natural gas from Egypt began flowing to Israel in a 100-km (63-mile) undersea pipeline from El Arish to Ashkelon , as part of a long-term bilateral deal agreed in 2005 between Israel Electric Company and the Israeli-Egyptian consortium East Mediterranean Gas (composed of Egyptian General Petrol Corporation + Israeli businessman Yossi Meiman’s Merhav company).
The Egypt-Israel pipeline running from El-Arish, on the northern Sinai coast to the Israeli coastal city of Ashkelon, apparently runs undersea about 10 miles off shore – but though the area demarcated as the Palestinian maritime space.
The planned development of the Palestinian offshore gas would have included the building of a pipeline from the Gaza Marine field to Ashkelon, where the gas would have been processed, and the construction of a secondary pipeline to transport the processed gas from Ashkelon back to Gaza City, for delivery to Gaza’s power plant.
This plan was worked up by BG (British Gas), which has 25-year development rights to the Gaza offshore gas deposits granted by the PA and the late Palestinian President Yasser Arafat, with input from the Palestine Investment Fund (PIF) and from the head of Palestinian Energy Authority, Dr. Kittaneh.
However, the plan was put on hold in December (for a second time) by BG, in exasperation with the difficulty of negotiations with the Israeli government who would have been the buyer of the Palestinian gas. The main sticking point concerned pricing matters – though Israeli concerns about ensuring that this revenue would not go to funding Hamas militancy also remained.
Nevertheless, Israel’s Minister of National Infrastructure Benjamin (Fouad) Ben Eliezer, continues to express great interest in the option.
In any case, around the time the Egypt-Israel gas supply agreement shaped up in 2005, it was then reported that a part of the Egyptian gas going to Israel could be also piped to the Gaza Power Plant — presumably pending the development of Gaza’s own offshore gas fields.
This scenario can still be dusted off to offer one quick fix – and there are signs that the possibility is under discussion.
Intriguingly, the talks that Egypt is conducting at the request of PA President Mahmoud Abbas, with Israel and “Palestinian factions”, and apparent American approval, could be shaping up to a grand deal.
But this will depend on order being restored to the current chaotic situation in Gaza – and calm in Israeli-Gaza as well as in overall Israeli-Palestinian relations.
The construction of part of the infrastructure envisaged for the development of the Palestinian offshore gas – that is, an Ashkelon-Gaza City pipeline – could theoretically move into the realm of the possible, though only if firing of rockets and missiles and other projectiles from Gaza is stopped.
Additional Egyptian gas could be piped to Ashkelon, then back to Gaza City.
Once the Gaza Maritime wells are developed and in production, the Egyptian gas could be then be “repaid” – to either Egypt or Israel, depending on the deal – with Palestinian gas.