Egypt will officially open negotiations to review the price of natural gas
exported to Israel, with the aim of doubling prices, Egyptian daily Al Masry al
Youm reported Thursday.
East Mediterranean Gas Company (EMG) has agreed
to begin negotiations later this month to review gas prices based on the 2009
agreement, which stipulates price increases on gas exports to Israel in
accordance with an agreed-upon percentage, sources at the Petroleum Ministry
told the paper.
Yosef Maiman owns 20.6 percent of EMG through
Ampal-American Israel Corporation and his private company Merhav
Al Masry al Youm quoted sources as saying the negotiations would
likely include the price increases proposed by the Egyptian Natural Gas Holding
Company (EGAS), the Petroleum Ministry and EMG, to achieve a balance between the
concerned parties with regards to prices and to ensure fair gas prices in
accordance with global price increases.
According to the paper, under the
2009 agreement, EMG pays EGAS $3.6 million per million British thermal units
(BTU) of gas. EMG, however, gets $1.5m. per million cubic meters of gas
transported to Israel, as it owns the infrastructure, including the pipelines,
filtering plants and compressors, which were built at a total cost of
The sources said Egypt would insist on doubling its revenues from
its exported gas to Israel during the price revision, based on global gas prices
for gas exported through pipelines to the European market, which do not fall
below $5m. per million BTUs, after deducting transport costs and distribution
and marketing commissions.
The Egyptian General Petroleum Corporation’s
net revenue from exported gas through the Egypt-Israel gas pipeline for the
fiscal year 2009-2010 ranged between $225m. and $250m. for nearly 2.1 billion
Ampal’s share price fell 3.2% to $1.21 on Nasdaq Wednesday,
giving it a market cap of $67m., and fell 0.6% to NIS 4.16 Thursday morning on
the Tel Aviv Stock Exchange. Ampal’s share has fallen over 20% since April 27,
when an attack on a pipeline in Sinai again halted