EMG partner takes legal action over Egyptian gas

US investors in East Mediterranean Gas Company have taken legal steps against the Egyptian government to ensure gas flow resumes to Israel.

May 30, 2011 23:10
1 minute read.
Flames from February attack on Sinai gas pipeline

Egypt gas pipeline blast 311. (photo credit: REUTERS)


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US investors in the East Mediterranean Gas Company (EMG) have taken legal steps against the Egyptian government to ensure gas flow resumes to Israel, Reuters reported Monday. Supplies have been halted for more than a month following explosions on Egypt’s side of the pipeline in the wake of the country’s political turmoil and ouster of president Hosni Mubarak.

EMG partner EGI notified the Egyptian government that it was seeking international arbitration over what it contended was Egypt’s failure to protect its investment as stipulated in a US-Egyptian agreement. EGI accuses the Egyptian government of “failing to provide EMG with full protection and security” for its investment and “refusing to resume delivery of gas to EMG.”

Report: Egypt seeks to double gas price to Israel
Egypt to resume gas supplies to Israel by Friday

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“We don’t think there is a political decision to stop gas exports to Israel, but rather a problem in the decision-making process within the Egyptian government,” An Israeli official told Reuters. The official said arbitration, which could lead to a ruling that Egypt had violated its agreement and force it to pay a large compensation, could take place in Washington within six months. EMG has invested $550 million in the off-shore pipeline that connects El-Arish in Sinai to Ashkelon, and Egypt is losing $4 million a day since gas deliveries were halted on April 27.

EMG is owned by Egyptian businessman Hussain Salem, Egypt Natural Gas Co, Thailand’s PTT Public Co. Ltd., EGI chairman Sam Zell, and Yosef Maiman through Ampal-American Israel Corporation and his private company Merhav Ltd.

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