A natural gas pipeline [illustrative]..
(photo credit: Courtesy)
Even though East Mediterranean Gas Company (EMG) said last week natural-gas
deliveries to Israel should resume by the end of May, that is unlikely to
happen. Egyptian daily Al Masry al-Youm reported Sunday that deep differences
remained between Israel and Egypt over Egypt’s demand to adjust the price of the
natural-gas sharply upward.
Egyptian Minister of Petroleum Abdallah
Ghorab told the newspaper EMG has voiced reservations over price increases,
while Israel completely rejects the suggestion. Formal negotiations are due to
start within days.
Ghorab said his ministry was handling the negotiations
from a purely economic perspective, focusing on securing the highest profit
possible for Egypt, regardless of political considerations.
the Egyptian people for convincing the company to review the price before 2013,
the earliest date allowed for a review as dictated by the deal signed between
Egypt and Israel in 2009.
The paper quotes a senior EMG official as
saying the Israeli side was sticking to the 2013 deadline because it knows the
current deal has a higher value than that of other export contracts signed by
the Egyptian government.
Last week, EMG shareholder Ampal-American Israel
Corporation announced that repairs on the pipeline had been
Technically, it was possible to resume Egyptian gas deliveries
to Israel, it said, but the gas flow would only resume after the Egyptian
government improved the security of natural- gas facilities in Sinai. Deliveries
were expected to resume by the end of the month, it said.
company responsible for Egypt’s natural-gas deliveries to Israel, built a
pipeline from El-Arish in Sinai to Ashkelon at a cost of $460
Deliveries began in 2008.
In 2010, EMG supplied 40
percent of Israel’s natural-gas needs, with Yam Tethys, owned by Noble Energy
Inc. and Delek Group Ltd., supplying the rest.