Egyptian minister sets conditions for approval of Israeli gas import deal

Egyptian minister sets conditions for approval of Israeli gas import deal

Oil minister says arbitration between countries must be settled over a debt of $1.76 billion owed by Cairo

Egyptian petroleum minister Tariq al-Mulla (YouTube screenshot)
Egyptian petroleum minister Tariq al-Mulla (YouTube screenshot)

Egypt’s oil minister said Tuesday Cairo would set some conditions before approving the import of Israeli natural gas to the country, as agreed between US Noble Energy, Israel’s Delek and Egypt’s Dolphinus Holdings.

Tariq al-Mulla, quoted by Turkey’s Anadolu news agency, said the gas imports must “add value to the Egyptian economy” — a likely reference to pricing — and that “arbitration between the two countries” must be settled.

He was apparently alluding to a debt of $1.76 billion Egypt owes Israel for a 2015 court judgment that found Cairo violated an agreement to supply natural gas.

The ruling, made by three arbitrators at the International Chamber of Commerce, came after the Israeli Electric Corporation claimed over $4 billion in damages stemming from Egypt canceling their bilateral gas deal in 2012.

An aerial view of an Israeli offshore gas rig (Albatross Aerial photography/Noble Energy/Flash90/File)

Before 2012, Israel imported natural gas from Egypt, though the pipeline, running through the restive Sinai Peninsula, was dogged by frequent sabotage. The deal was finally canceled by Egyptian authorities following the 2012 ouster of president Hosni Mubarak.

On Monday the partners in Israel’s Tamar and Leviathan natural gas fields, including a unit of US Noble Energy Inc and Delek Drilling LP, signed $15 billion in deals to export natural gas to Egypt over 10 years.

In a filing to the Tel Aviv Stock Exchange, Delek said Noble Energy Mediterranean and its partners in the fields have signed accords with Egypt’s Dolphinus Holdings Ltd. for the sale of some 64 billion cubic meters of natural gas from the two fields.

Delek said the partners were considering various options for the supply of the gas to Egypt, including via a Jordanian-Israeli pipeline that is currently being built or the use of the existing East Mediterranean Gas pipeline. Another option is to transport the gas to Egypt by connecting the Israeli transmission system to its Egyptian counterpart, the statement said.

Prime Minister Benjamin Netanyahu called the deal with the Egyptian firm “historic” and said it would yield billions for state coffers for the benefit of education, health and welfare.

Shoshana Solomon contributed to this report.

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