On Monday, Israel's Delek Drilling company announced that Egyptian private company Dolphinus is set to import gas from Israel worth $15 billion, pending regulatory approval from both countries.
As was the case with the similar deal with Jordan, this is causing some Egyptians to be upset.
From Al Ahram:
Egyptian leftist MP Abdel-Hamid Kamal, who represents the governorate of Suez, has submitted an urgent information request on Tuesday asking that Petroleum Minister Tarek El-Molla be summoned to parliament as soon as possible to explain to MPs reports that Israel has signed two agreements to sell gas to Egypt.In response, the Petroleum Ministry tried to downplay the news:
Kamal's request, submitted to parliament speaker Ali Abdel-Aal, said, "Importing natural gas from Israel would be in violation of Article 139 of the constitution, which states that the main job of the president of the republic is to preserve the people's interests and maintain the independence of the state and the integrity and safety of its land."
"Any gas deal with Israel goes against this article, as Israel is still an enemy of Egypt in practical and de facto terms," argued Kamal, who is affiliated with the leftist Tagammu Party.
Kamal told Ahram Online that "gas deals with Israel pose a big threat to Egypt's internal security and national economy… It gives Israel, an enemy to Egypt, a hand to manipulate Egypt's economy, as dependence on gas imports from the Jewish state for a long period of time will surely be very risky," said Kamal.
“The deal also raises questions about the private Egyptian company Dolphinus: who are [the company’s] owners? Does it have foreign partners, and how were they able to sign a 10-year deal that will do a lot of harm to the Egyptian economy and delay the liquification of Egyptian gas?”
The deal triggered wide-scale reactions in Egypt's economic and political circles yesterday, and was a hot issue on most private TV talk shows on Monday night.
Egypt’s petroleum ministry responded on Monday to news of a massive gas deal between Egyptian private company Dolphinus and Israeli gas firms, saying it makes "no comment on negotiations or deals involving private sector companies over importing or selling natural gas."In an Arabic interview, the minister struck a slightly different tone:
In press statements on Monday evening, Egypt’s petroleum ministry spokesman Hamdy Abdel Aziz said the ministry would deal with any permit or license requests by the private sector in accordance with applicable regulations, in light of Egypt’s strategy of becoming a regional hub for energy.
He added that the government has been taking measures to liberalize the natural gas market, putting in place a regulatory framework that allows private companies to use the national gas grid to trade within approvals and requirements laid down by the Gas Market Regulatory Authority.
The minister stressed that in the case of implementation of this order, Egypt has three conditions before it is accepted, the first is the approval of the government, the second to achieve value added to the Egyptian economy, and the last to find solutions to international arbitration issues outstanding with the other party.Interestingly, Egypt has recently announced that it will start pumping a large gas field itself:
In December, petroleum minister Tarek El Molla said that Egypt will achieve self-sufficiency in natural gas before the end of 2018.One must wonder why the Egyptian firm struck a ten year deal when Egypt claims it will be self-sufficient in natural gas in only two years.
Mammoth gas gield Zohr and the North Alexandria and Nooros fields are expected to increase Egypt's natural gas output by 50 percent in 2018 and 100 percent in 2020, the Ministry of Petroleum said in October.
Perhaps the Zohr field isn't quite as ready as they claimed.