Voided Contract with U.S. Firm May End Israeli-qatari Gas Deal

The future of a multibillion-dollar natural gas supply deal between Israel and Qatar has been thrown into doubt after Israel withdrew a letter giving an American firm exclusive negotiating rights to the deal.

In mid-September, the director general of the Israeli Infrastructure Ministry, Giora Ram, sent a letter to Enron stating that the company no longer had exclusive rights to conclude a deal with Qatar for the supply to Israel of some 2 million tons of natural gas annuaily.

Enron’s exclusive negotiating rights were granted in a letter signed by then- Energy Minister Gonen Segev at the October 1995 Middle East economic conference in Amman.

The exclusivity was granted for 180 days, which passed without any agreement being signed for delivering the gas to Israel.

The deal would have involved shipping the gas in liquid form aboard tankers from Qatar to Israel, where it would be reconverted to gas form at a plant that was to be built for the purpose at a cost of some $300 million.

Israel was thought to have canceled the deal in order to pursue cheaper sources of gas in Egypt or Russia.

According to news reports Thursday, Qatar expressed dismay over the Israeli move.

But Israel’s Infrastructure Ministry said it was not aware of any official protest. The ministry also said Enron could continue to negotiate with Israel to reach a deal.

The reports said the development could be a further blow to Israel’s fledgling ties with Qatar.

Earlier this week, after the latest wave of violence in Israel, Qatari Foreign Minister Sheik Hamad bin Jassim al-Thani said his country was delaying the opening of a trade office in Tel Aviv to protest what it termed Israel’s hard- line policies.

The foreign minister also reportedly canceled a scheduled meeting with Israeli Foreign Minister David Levy.

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