Egypt Says Gas Agreement 'Suspended, Not Cancelled'

Gas Pipeline

Senior Egyptian official says the agreement of supply of gas to Israel has only been suspended because of financial issues.

By Elad Benari

First Publish: 4/23/2012, 3:16 AM

Reuters

A senior official in the Egyptian army said on Sunday the agreement of supply of gas between Egypt and Israel was not cancelled but only suspended.

According to a report on Army Radio, the official said that the suspension came about following a dispute regarding the transfer of funds.

Earlier, Channel 2 News reported that Egypt had informed Israel that it is unilaterally cancelling the agreement. The announcement was made to EMG, the firm that receives the gas from Egypt.

Egypt’s natural gas company declared, according to the Army Radio report, that the gas agreement was cancelled for business reasons and not political ones. According to the report, the company said that Israel had failed to honor its obligations under the contract and did not pay for the gas for months.
Conversely, Ampal-American Israel Corporation, one of the partners in EMG, said that the termination of the agreement is invalid. The company said it will demand financial compensation, and that it is considering suing the Egyptian government.

Meanwhile, Energy Minister Uzi Landau said Sunday evening that the Ministry of Energy and Water has been preparing for about two years for the possibility of the supply of gas from Egypt coming to an end.
“Israel is working to establish its energy independence and rapid develop Israeli supply sources,” Landau said, according to Army Radio. He noted that for the past year there has not been a steady supply of gas from Egypt.

The pipeline carrying gas from Egypt to Israel was blown up 14 times since the Mubarak regime was toppled in February 2011.

Egypt Cuts Natural Gas to Worried ’’Israel’’

Local Editor

Egyptian energy companies have terminated a deal to supply the Zionist entity with natural gas.

An "Israeli" partner in the business made the step public on Sunday but an Egyptian firm said the decision to cancel the deal had been made on Thursday.

"Israel", which relies on Egypt for 40 percent of its natural gas supply, is worried about facing further energy cuts after a series of attacks on the pipeline running through the Sinai peninsula.
"Israeli" Finance Minister Yuval Steinitz expressed "great concern about the suspension," saying "it had a dangerous precedent which casts a shadow on the peace agreements and the peaceful atmosphere between Egypt and "Israel"."

The Egyptian decision was announced in "Israel" by Ampal-American "Israel" Corporation, partner in the East Mediterranean Gas Company (EMG), which operates a cross-border pipeline supplying gas to "Israel".

Ampal said the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company had told EMG they were "terminating the gas and purchase agreement."

"EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal," Ampal claimed in a written statement.

Mohamed Shoeib, chairman of the Egyptian company EGAS, confirmed the decision, saying the 20-year-old deal with "Israel" had been terminated on Thursday.
Shoeib told Egypt's Hayat TV that "EGAS ended the deal because the other party didn't fulfill its commitments."

The Zionist entity, aiming to avoid further damage to its troubled ties with Cairo, said on Monday it saw the Egyptian termination of natural gas as part of a business rather than a diplomatic dispute.

"Israeli" Foreign Minister Avigdor Lieberman told "Israeli" radio stations the cancellation of the deal was "not a good sign," but added: "We want to understand this as a trade dispute. I think that to turn a business dispute into a diplomatic dispute would be a mistake."

""Israel" is interested in maintaining the peace treaty and we think this is also a supreme interest of Egypt," he said.


Source: News agencies, Edited by moqawama.org

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