Will gas deal prompt Cairo to warm up the cold peace?

The gas deal comes two years after Israeli agreements were signed to supply Jordan with gas from the Leviathan field.

An Israeli gas platform is seen in the Mediterranean, 24 km. west of Ashdod (photo credit: AMIR COHEN/REUTERS)
An Israeli gas platform is seen in the Mediterranean, 24 km. west of Ashdod
(photo credit: AMIR COHEN/REUTERS)
Although it was hailed by Prime Minister Benjamin Netanyahu as “historic,” it is uncertain whether the $15 billion deal announced on Monday to sell natural gas to Egypt will actually fuel a major warming in Cairo’s cold peace with Israel.
The peace has been characterized by close ties in the security realm only, with Israel according to foreign reports bombing targets of the Islamic State insurgency in Sinai in addition to sharing intelligence.
Israel announces new agreement to export natural gas to Egypt, February 19, 2018. (GPO)
The deal, in which the private Egyptian consortium Dolphinus will purchase around 64 billion cubic meters of gas over 10 years from the offshore Tamar and Leviathan fields, has come under attack in Egypt for being a “normalization” step. But President Abdel-Fattah al-Sisi defended the economic reasoning behind it on Wednesday, saying it fits in with plans to turn Egypt into a regional “energy hub” that imports raw gas, liquefies it, and then exports it.
“It is too early to say with certainty that this is a breakthrough toward normalization of relations,” said Ofir Winter, an Egypt specialist at the Institute for National Security Studies.
“This is only one pinpoint subject.”
He added that earlier deals on fuel and gas supplies between the two countries had not brought about a breakthrough.
But, Winter said, the involvement of a private Egyptian company could be highly significant, since the Egyptian government has in the past discouraged private individuals and companies from forging ties with Israel. “If this will widen in a way that private citizens can conduct business, it will be excellent,” he said.
He added that the deal could become a wider platform for regional cooperation in the eastern Mediterranean that would bring together Egypt, Israel, Cyprus and Greece and possibly other countries in Europe. “There is potential for a breakthrough,” he said.
However, the Egyptian government, wary of criticism that it is normalizing relations and becoming reliant on what many Egyptians still consider to be an enemy state, is couching the agreement strictly in economic terms and not acknowledging any political dimensions to a pact that Energy Minister Yuval Steinitz has described as the most significant export deal with Egypt since the peace treaty was signed in 1979.
Sisi, in remarks published by Al-Masry al-Youm on Wednesday, stressed that it was a private company, not the government that had made the deal with Israel’s Delek Group Ltd. and Texas-based Noble Energy.
“It is a private business, but as a state we have nothing to hide.”
He seemed to play down the centrality of Israel to Egyptian gas policies, placing them instead in a larger regional context. Referring to the fact that Egypt has two gas liquefaction factories, Sisi cast the deal as part of a broader drive in which raw gas could be imported from Cyprus, Israel and Lebanon, be made usable, and reexported.
“There are no logistical installations in some of these countries and we have to use this region and benefit from it. We are trying to make Egypt a regional hub for energy and we have to maximize the benefits it has from its capabilities and installations regarding raw gas discovered in the region.”
Exporting processed gas will “give abilities to the private sector to maximize revenues and use it in other industries,” he said.
Winter summed up the Egyptian government attitude as being one of “apoliticization” of the agreement.
Still, Egyptian critics of the peace treaty blasted the deal.
“Gas deals with Israel pose a big threat to Egypt’s internal security and national economy,” said left-wing MP Abdel-Hamid Kamel, who was quoted in Al-Ahram. “It gives Israel, an enemy to Egypt, a hand to manipulate Egypt’s economy, as dependence on gas imports from the Jewish state for a long period of time will surely be very risky.”
The gas deal comes two years after Israeli agreements were signed to supply Jordan with gas from the Leviathan field.
The London-based, pan-Arab website Rai Alyoum on Wednesday voiced horror at the Egyptian move. “We never imagined we would see the day that confrontation states like Egypt and Jordan import stolen Arab Islamic gas from the occupation state and pour billions of dollars into its treasury that can be channeled into armaments for launching wars against Arab and Islamic states.”