Egypt suspends natural gas talks with Israel after losing $1.7B lawsuit ~ Elder Of Ziyon

Monday, December 07, 2015

Egypt suspends natural gas talks with Israel after losing $1.7B lawsuit

One of the cases of sabotage

Egyptian Minister of Petroleum spokesperson Hamdy Abdel Aziz said they will appeal the Swiss court decision of fining the ministry and the holding company for natural gas (EGAS) with USD 1.7 bn to Israel electricity company and USD 288 m to the Mediterranean Gas company on Sunday.

An international Swiss court issued a verdict after more than three years against Egypt when the Israeli company filed a lawsuit calling on Egypt to pay USD 4bn due to shortages caused in their natural gas supply after suspension of the 20 year long agreement of exporting gas from Egypt to Israel, which hindered their electricity exports, in the wake of January 25 uprising in 2011 and the constant attacks on the gas pipeline which followed the uprising.

Abdel Aziz told CNBC Arabia channel in a TV interview on Sunday, “the contract with Mediterranean Gas ended on 2012 for not paying delayed expenses and there are lawsuits filed against them because of that”.

“The ministry will suspend talks of some companies importing gas from Israel until all the appeal procedures are done,” he said.

In late November, partners in the Israeli Leviathan gas field announced in the Israeli stock market their initial short term agreement with an Egyptian company to supply it with gas. The Leviathan gas field is scheduled to launch in 2019/2020.

Israel is, perhaps overly, optimistic:

Israel hopes that its “close ties” with Egypt will enable talks on gas exports to restart, Energy Minister Yuval Steinitz said, following an Egyptian decision to halt negotiations. Israel is also planning to advance exports to other markets including Jordan, Turkey and Western Europe, he said.

“The State of Israel assigns great importance to its security and energy ties with Egypt in their entirety, and hopes that due to its close bilateral ties, it will be possible to continue to move forward on the gas issue soon,” Steinitz said in a text message. Israel must develop its offshore gas fields quickly to achieve energy security, he said.

Egypt exported natural gas to Israel until it canceled the deal in 2012 as its wells became depleted and new exploration slowed. It has said that any gas import deal with Israel should include a resolution to international arbitration cases.

Egypt’s decision to suspend the talks may be temporary, Amos Gilad, a senior Defense Ministry official, said in an Israel Radio interview. He also emphasized Israel’s ties with the country as well as Egypt’s role as a stabilizing influence in the region.

“You have to look at the entire picture,” Gilad said. “There is a whole set of interests.”

But will Israel interfere with the legal issues between private Israeli and Egyptian companies the way Egypt is?

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