A number of actual or potential energy projects in the Eastern Mediterranean region are dogged by geopolitical problems.

For example, differences between Cyprus and Turkey are preventing cooperation in finding a market for Cypriot gas, while tensions between Lebanon and Israel could impede exploration in Lebanese waters.

Less talked about is the fate of Gaza Marine, a field discovered 36km (22 miles) off the coast of Gaza in 2000 by a consortium led by BG.

At the time, there was jubilation. With estimated reserves of at least 1 trillion cubic feet of gas, it appeared to offer hope to the 1.6m Palestinians crammed into the economically-challenged Gaza Strip. The late Palestinian leader Yasser Arafat, speaking with his customary theatricality on a boat at the site of the discovery, characterised it as “a gift from God” that would “provide a solid foundation for our economy, for establishing an independent state, with Jerusalem as its capital”.

The goal of an independent state is still nowhere within reach, and President Trump’s recent decision to move the US embassy to Jerusalem complicates still further the chances of the city ever becoming the Palestinians’ capital. There’s been no movement, either, on the Gaza Marine field. Developing it and bringing the gas ashore would require Israeli cooperation at every stage. This hasn’t been forthcoming. A string of political and economic issues—not to mention significant periods of military conflict—have prevented any production and distribution plans being implemented.

Hopes were raised last year when the two rival wings of the Palestinian movement, Fatah in the West Bank and Hamas in the Gaza Strip, announced yet another reconciliation accord. But this has made scant progress, and Trump’s Jerusalem decision and recent rocket attacks from Gaza into Israel have increased tension again. As long as Hamas continues to control Gaza it’s highly unlikely that Israel will allow the offshore field to be developed.

Shell, which bought BG’s worldwide assets in early 2016, also seems to have concluded that Gaza Marine isn’t a realistic prospect. It informed the Palestine Investment Fund last year that it was looking for a company to buy its 55% stake in the project. According to a recent Reuters report, Shell is having problems finding a buyer.

The company’s lack of enthusiasm for the offshore prospect is such that a search of the company’s website produces no results for Gaza; and anyone wanting to inquire about Shell operations in Palestine is asked to write to a post-office-box address in The Hague. Whatever happens elsewhere in the Eastern Med, Gaza Marine looks like being a prisoner of geopolitics for some considerable time—perhaps even beyond the current licence expiry date of 2024.

Originally published in: http://www.petroleum-economist.com/articles/midstream-downstream/lng/2018/gaza-gas-stranded-at-sea