Friday, February 13, 2015

Egypt 'doesn't mind' Israeli gas

A week after Reuters broke the news of talks between the Egyptian Natural Gas Holding Company (EGAS) and the American Noble Energy Company, which operates Israeli gas fields, the Ministry of Petroleum appears to publicly support a new policy that would allow the importation of Israeli gas.

In 1979, Egypt became the first Arab country to sign a peace agreement with Israel. Despite full diplomatic relations, official niceties and, many years later, US-encouraged commercial and business agreements between the two former enemies, normalisation with Israel remained taboo and was rejected by the wider public.
So when former president Hosni Mubarak approved a 20-year agreement to export Egyptian gas to Israel in 2005 it caused a political uproar that continued until his ouster in February 2011.

Not only was Egypt pumping natural gas directly to Israel, it was doing so at below-market prices through East Mediterranean Gas (EMG), then co-owned by Mubarak 's friend Hussein Salem and former Israeli Mossad agent Yossi Maiman, who then sold the gas to Israel at higher rates, pocketing the difference.

In the aftermath of the uprising that toppled Mubarak in 2011, Egypt unilaterally terminated this agreement, citing failures by the Israeli side to meet payment deadlines in violation of the contract.

The decision was met with relief and a sense of revolutionary achievement, but things did not end there. When Mubarak was referred for trial in 2011, the gas deal was added to the corruption charges (a Cairo court dismissed the charges three months ago because the charges were too old to fall within its jurisdiction.)

More than four years later, Egyptian officials are negotiating a reversal of the gas deal through the very same pipeline that exported the gas to Israel, according to Reuters and official statements attributed to top-level officials in the ministry of petroleum......................

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