Israel has approved in principle the purchase of Palestinian gas from British Gas, the company developing a field off the Gaza Strip, Prime Minister Ehud Olmert’s office said.
"The government decided to cooperate with British Gas," an official at Olmert’s office said, without elaborating.
"If such a contract is finalized, it can bring the Palestinian Authority dividends worth tens of millions of dollars per year," army radio said after the weekly cabinet meeting when the decision was taken.
The government approved the move despite objections from several ministers, including hardline strategic affairs minister Avigdor Lieberman of the ultra-nationalist Yisrael Beitenu party, the radio said.
The gas will come from the "Gaza Maritime" fields discovered off the coast of the troubled coastal strip in 1999-2000, and which are thought to hold reserves of 40 billion cubic meters.
British Gas clinched a 20-year concession on the fields in partnership with Consolidated Contractors Co. (CCC), a firm owned by the powerful Palestinian Khury and Sabbagh families.
The British energy giant and Israel have engaged in nearly six years of talks over the possible purchase of Palestinian gas.
Last May, British Gas abruptly broke off negotiations, saying that Israel was not ready to pay the market price.
But negotiations resumed a month later after Olmert visited London and discussed the issue with Finance Minister Gordon Brown.
(Middle East News)