British Gas announced on Friday that it had almost completely abandoned the search for natural gas in Israel. It also said that it was quitting the Gal natural gas exploration partnership, which it heads. The Gal partnership would have been the largest natural gas exploration to be carried out offshore from Haifa in the coming years.
British Gas owns 40% of Gal. The other partners are Isramco (Nasdaq: ISRL; TASE: ISRA.L), Dor Gas and Benjamin (Benny) Steinmetz. So far as is known, British Gas decided to quit the Gal partnership after concluding that investing tens of millions of dollars was not worthwhile, without certainty that it could sell natural gas to Israel Electric Corporation (IEC).
British Gas lost an IEC natural gas tender four years ago. Yam Thetis and a group of businessmen led by Joseph Maiman won the tender.
At one point, IEC considered buying natural gas from the British Gas and Palestinian Authority fields offshore from Gaza, but Prime Minister Ariel Sharon vetoed the idea, for security reasons. British Gas has only one customer, Ofer Brothers, which is expected to buy natural gas for the power stations it will build in partnership with British Gas.
British Gas is still a partner in Med Yavne partnership, which is carrying out small-scale drillings offshore from Ashdod.
Natural gas exploration industry sources said today that the fate of the $60 million Gal exploration drilling was now unclear.
Published by Globes [online], Israel business news - www.globes.co.il - on March 6, 2005