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Gas deal for future Palestinian power station terminated

March 11, 2015 5:22 P.M. (Updated: March 24, 2015 11:21 P.M.)
BETHLEHEM (Ma'an) -- The Palestine Power Generation Company (PPGC) is set to terminate a $1.2 billion deal with the Israeli-American Leviathan reservoir partners that would have supplied natural gas to a future Palestinian power plant, it was reported on Wednesday.

The controversial deal, which was signed more than a year ago, allowed for the sale of approximately 4.75 billion cubic meters of gas over the course of 20 years to the PPGC, to fuel a future power plant in Jenin with a 200-megawatt capacity.

The Tel Aviv Stock Exchange reported that the PPGC notified the Leviathan partners of the deal's termination on Tuesday.

The Jerusalem Post reported that the termination came as the consequence of a looming antitrust dispute over the Leviathan partnership.

The Leviathan field, one of the world's largest offshore gas fields, is currently overseen by a partnership between American company Noble Energy and the Israeli company Delek.

However, in December 2014, Israel's Antitrust Authority recommended a breakup of the partnership, casting uncertainty over Noble-Delek's existing deals, which also include a $15 billion deal to sell gas to Jordan's national power company, and a $30 billion contract with Britain's BG Group in Egypt.

In addition to this uncertainty, however, PPGC has also come under intense pressure to cancel the deal following a long running campaign by activists from Boycott, Divestment and Sanctions (BDS), PLO members and other campaigners.

It was reported on Feb. 25 by Al-Araby Al-Jadeed that the Palestinian Authority had already decided not to ratify the deal.

PPGC is privately owned by Munib al-Masri's company Padico Holding as well as Said Khoury's Consolidated Contractors Company (CCC). It was formed in 2010 with the intention of establishing the first power station in the West Bank.

However, the gas deal with Noble-Delek would have required PA support to successfully go through.

Since it first emerged, the PA has been keen to distance itself from the deal. Omar Kittaneh, head of the Palestinian Energy Authority, reportedly said the PA had not been part of the agreement.

Voicing the concerns of activists, Qais Abdulkarim, Deputy Secretary-General of the Democratic Front for Liberation of Palestine (DFLP), told Al-Araby Al-Jadeed: "The main concern was that the agreement with an Israeli counterpart will deepen dependency on Israeli economy for another 20 years, instead of working to end this dependency."

Critics have also been angered by a deal to buy gas from an Israeli company while the Israeli authorities continue to withhold Palestinian tax revenue.

Abdulkarim said it was "absurd to go through such a deal while the Israeli government withholds PA money."

PPGC has said it will seek Palestinian natural gas for the future West Bank power plant instead.
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