Egypt petition targets Israeli gas deal

Group of Egyptian lawyers claim natural gas exports to Israel cause Egypt to lose $9 million a day.

gas station (photo credit: Ariel Jerozolimski)
gas station
(photo credit: Ariel Jerozolimski)
An Egyptian court is reviewing a petition by a group of lawyers to halt Egypt's natural gas exports to Israel, one of the attorneys said Monday. Lawyer Ibrahim Yousri said the petitioners want to stop the deal because it involves below market gas prices of only $1.5 per British thermal unit, a measure of energy. The market price is almost nine times higher and Yousri said Egypt has been losing about $9 million a day over it. "If this not theft what else could it be," Yousri told The Associated Press. "Egyptians are in a dire need of every penny, so why does the government squander these resources?" According to Yousri, Judge Ahmed el-Shazli on Monday asked the petitioners to present documents supporting their case and adjourned the hearings till October 17. Egypt began pumping gas to Israel in February, following an energy deal under which Cairo-based East Mediterranean Gas (EMG) is to sell 1.7 billion cubic meters of gas annually to state-run Israel Electric Corporation for the next 15 years. But after heavy criticism by the opposition, Egypt's minister of petroleum, Sameh Fahmy, told parliament in June that the government would review the price of gas exports to Israel. EMG is a private energy consortium co-owned by Egyptian businessman Hussein Salem and the Israeli Merhav Group. The government says the deal provides Egypt with million of dollars annually. Egypt has reserves of 3 trillion cubic meters, according to ministry figures. Last year it produced some 62 billion cubic meters, a quarter of which was sold on the international market. Egypt is one of the few Arab states - along with Jordan and Mauritania - that officially recognize Israel, but ties remain taxed by Arab resentment of Israeli policies toward the Palestinians. On Monday, the influential Middle East Economic Survey said Egypt is mired in a political debate on its gas policy, with the government under pressure to limit exports in order to be able to meet soaring local demand at the expense of much-needed revenue. According to the Cyprus-based publication, Egypt's Ministry of Petroleum announced in June a moratorium on further export projects until 2010, and there are signs that gas exports have already been affected by this policy shift.