Egypt unilaterally cancels gas deal with Israel

[LivinginLuxor]

Totally agree - it should never have happened!

"Egypt has unilaterally terminated its natural gas export contract with Israel, a shareholder in the export operating company, East Mediterranean Gas Company (EMG), said Sunday night.

Ampal-American Israel Corporation, which owns a 12.5 per cent stake in EMG, announced that it had been notified by EMG that Egypt was ending the Gas Supply and Purchase Agreement between the two parties.

“Egyptian General Petroleum Corporation [EGPC] and the [state-run] Egyptian Natural Gas Holding Company [EGAS] notified EMG that they were terminating the Gas Supply and Purchase Agreement between the parties,” the Ampal statement read.

Egyptian authorities have yet to make an official announcement on the development.

The company added that "EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal," noting that EMG, Ampal and EMG's other shareholders were "considering their options and legal remedies as well as approaching the various governments."

The 20-year natural gas deal signed between Israel and Egypt in 2005 has been a pillar of Egyptian-Israeli economic cooperation following the historic 1979 peace treaty between the two countries.

Israel, which depends on Egyptian natural gas for 40 per cent of its energy needs, has been adversely impacted by the repeated interruption of gas supplies resulting from frequent attacks on the north Sinai pipeline since last year's revolution.

The pipeline transporting Egyptian gas to Israel and Jordan has been rocked by 14 explosions – by unknown assailants – since the January 25 2011 uprising that led to the ouster of longstanding president Hosni Mubarak.

Previous explosions have resulted in weeks-long supply stoppages of the pipeline run by Gasco, an EGAS subsidiary.

Supply has been halted since a previous attack on 5 February 2012. The last attack took place on 9 April.

No group has claimed responsibility for the attacks on the pipeline, which transverses an increasingly restive Sinai Peninsula.

Over the course of the last decade, Egypt has become a key natural gas producer, developing gas fields in the Mediterranean Sea. It began exporting liquid natural gas (LNG) in early 2005.

Egypt's Mubarak-era gas deal with Israel has proven highly unpopular with the Egyptian public.

Some critics accused the ousted Egyptian strongman of selling the gas to Israel at below international prices, thus depriving the Egyptian economy of badly needed funds. Others critics have decried what they describe as government complicity in financially supporting Israel's war on the Palestinians.

Egyptian authorities announced plans in November to step up pipeline security with the installation of alarm systems and security patrols carried out by local Bedouin tribesmen."

From Ahram Online - http://english.ahram.org.eg/NewsContent ... with-.aspx

[Arthur]

Can anyone explain why, when "Egypt has become a key natural gas producer, developing gas fields in the Mediterranean Sea" and is able to pipe gas to supply Israel's needs, so many Egyptians still rely on bottled gas?

[LivinginLuxor]

Perhaps it's purely the lack of infrastructure! Even in Britain, many rural areas have to rely on bottled gas (OK - they have a giant gas bottle in their garden) which is filled by a tanker, but piped gas - no way!

New developments, like New Qurna, have piped gas, but as it is more expensive many still prefer to use bottled gas.

[Teddyboy]

I know that I'll get it in the neck for saying this, but: I certainly wouldn't like gas piped into my house by Egyptian workers. Sorry, but I'm writing from experience!

[Who2]

I have been told by residents in New Qurna that they don't pay for their gas.........
mind you I'm probably wrong!

[TonyC]

TB and others might not have to worry about piped gas for a while yet...

Egypt's electricity and fuel minister Hassan Yunis said on Monday the natural gas being exported to Israel under a controversial deal that was scrapped last week would be used domestically.
"The gas that used to be exported to Israel will be directed to Egyptian electricity plants, as we have more right to it," he told reporters.

http://english.ahram.org.eg/NewsContent ... home-.aspx

Now, better electricity supplies have got to be good thing.

Then again, it could all be down to the price...

A senior Egyptian minister said on Monday her country is ready to resume gas exports to Israel but at a new price, after scrapping a long-term contract.
International Cooperation Minister "Fayza Abul Naga said the Egyptian side had no objections to reaching a new contract with new conditions and a new price," the official MENA news agency reported.

http://english.ahram.org.eg/NewsContent ... rice-.aspx

[Andrew Earl Singer]

The economy in Egypt according to what I am seeing on TV is so bad that to deplete Egypt of any money is absurd.

[TonyC]

But Egypt hasn't been getting the money, surely – which side has been breaking the contract?

[Winged Isis]

I seem to remember reading on here that pipes were laid on the WB over a year ago. Was that solely for New Qurna then? I had assumed it was for all the villages , if not immediately, then eventually.