3 June — Talks to resume gas exports from Egypt to Israel through the East Mediterranean Gas Pipeline are continuing, almost two months after an explosion shut the pipeline down.
A gas valve station on the Egyptian side of…
3 June — Talks to resume gas exports from Egypt to Israel through the East Mediterranean Gas Pipeline are continuing, almost two months after an explosion shut the pipeline down.
A gas valve station on the Egyptian side of the 100km pipeline was attacked on 27 April this year, 2011. Repair work has now been completed and the line is technically ready to resume gas flows, but there is as yet no agreement on when they will restart.
On the sidelines of the Gas Exporting Countries Forum (GECF) in Cairo this week, Egypt’s Petroleum Minister told Reuters that the timetable for resuming gas supplies was “under review”. He added that East Mediterranean Gas (EMG), a privately held Egyptian-Israel joint venture that operates the pipeline, and the state-owned Egyptian Natural Gas Holding Company (EGAS) were “talking on this issue every day”.
Some of the owners of EMG, including the Ampal-American Israel Corp. (Ampal) and US investment fund Equity Group Investments (EGI), are initiating arbitration proceedings at the International Centre for the Settlement of Investment Disputes against the Egyptian government because of what they see as contract breaches. They say the failure to supply gas for the
pipeline constitutes a breach of trade treaties between the United States and Egypt.
The shutdown is already having an effect in Israel, where Eli Glickman, CEO of the Israel Electric Corp. (IEC), told politicians in the
Knesset on 31 May that the price of electricity would soar unless Egyptian gas imports resumed. IEC signed a 15-year sale and purchase agreement with EMG in 2005 for the supply of 1.7 bcm/yr (starting in 2008). Israel gas demand is set to increase over the next few years as IEC converts a number of its power plants to run on gas, the Oxford Institute for Energy Studies says.