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Signing the deal (Archives) Photo: Israel Haderi
Signing the deal (Archives) Photo: Israel Haderi
 
 

Egypt to appeal ban on natural gas deal with Israel

Egyptian authorities said to appeal Cairo Court decision to suspend gas deal with Israel. Analysts say decision may prompt renegotiation of terms

Roee Nahmias
Published: 11.19.08, 17:28 / Israel Business

The Egyptian authorities announced that they will appeal the Cairo Court ruling barring the export of natural gas to Israel, several Arab media outlets reported Wednesday.

 

According to the reports, the "Egyptian State Administration" will file its appeal with a higher instance, in order to circumvent the decision.

 

Ibrahim Oseary, one of the petitioners, told the Arabic-language London-based al-Quds al-Arabi newspaper that the appeal is expected to go smoothly, since "the government is obligated to execute the court's order immediately."

 

Oseary, however, may not be right: The Egyptian judicial system enjoys relative ruling freedoms, but the authorities can still find various ways to avoid action on the courts' orders, either by appealing them or by simply ignoring them.

 

Several Arab analysts suggested that Egypt may use the ruling in order to renegotiate the deal's original terms.

 

"This is by no means a simple thing. The sales deal was illegitimately orchestrated, and it exceeds the government and the parliament's authorities," said Oseary. "If the government wanted to do the right thing it would use this ruling to renegotiate the price."

 

As for the timing of the verdict, Oseary added that "the natural gas deal saves the Israeli consumer about 20% in costs. Why shouldn’t we send it to Gaza instead?"

 

Israel and Egypt's East Mediterranean Gas company (EMG) signed the natural gas deal in 2005. Under the deal, EMG is to supply Israel with 1.7 billion cubic meters of natural gas a year, for 20 years.

 

Subsequently, EMG and Israel Electric Corp have signed a $4 billion deal for the next 15 years. Egypt also invested $470 million in the construction of a pipeline leading to the Ashkelon power plant, which became operational in April, and is currently Israel's largest natural gas provider.

 

New pipeline aside, the gas flow into Israel has not been consistent, coming to a complete halt four times.

 

The Ministry of National Infrastructures released the following statement: "The State of Israel is sure that the agreement signed between the Israeli and Egyptian governments will continue as planed, in accordance to the memorandum signed to that effect in 2005.

 

"The Ministry of National Infrastructures has no doubt that the commercial agreement signed between the Egyptian gas company and its Israeli clients is still valid. We are sure that the gas supply from Egypt will continue as usual."

 

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