The Globes business newspaper says that no firm agreement has been reached, partly because BG is stipulating that IEC take a minimum of 1.2bcm per annum. IEC reportedly claims that it cannot commit to such a quantity, and that in any case a fresh supply of natural gas would not be required until 2011.
The reports of talks between the two sides have surprised industry watchers, the newspaper adds, as it was thought that BG would use its gas fields in the Middle East to sell to Egypt rather than Israel.
This follows a dispute between BG and the currently incapacitated Israeli premier Ariel Sharon in 2003. Mr Sharon was concerned that revenues from BG’s fields off the coast of Gaza, operated in conjunction with the Palestinian Authority, may be finding their way to terrorist organizations, according to a report from United Press International.
The news of talks between Israeli officials and BG comes just days after interim Israeli prime minister Ehud Olmert met with Alexei Miller, Gazprom’s chief executive, to discuss the idea of a new gas import route from Russia.
The developments reflect an apparently growing consensus in Israel that the country needs to widen its sources of gas supply to counter the recent rise in commodity prices.
