Israel may let Egypt slide on nearly $900 million from a fine over an energy deal, as Jerusalem courts warmer business ties with Cairo, according to a report this week.
Egypt owes Israel $1.76 billion for a 2015 court judgment that found Cairo violated an agreement to supply natural gas.
Egypt cut off talks to import Israeli natural gas after the ruling, but two officials close to the case quoted by Bloomberg Wednesday said Israel may forgive half the fine, paving theway to reopening negotiations.
According to Bloomberg, payments would be spread over 14 years and talks are still underway.
There was no official confirmation of the report, which comes as Israel has been signaling other moves to warm up to Cairo, including recently upgrading embassies in Cairo and Jerusalem.
On Sunday, Israel is expected to return two Bronze-Age wooden anthropoid sarcophagus lids to new Egyptian Ambassador to Israel Hazem Khairat at a Foreign Ministry ceremony on Sunday, four years after they were discovered smuggled into the Jewish state.
The $1.76 billion ruling, made by three arbitrators in a closed session in December, ended 3.5 years of deliberations in which the Israeli Electric Corporation was claiming over $4 billion in damages stemming from Egypt canceling their bilateral gas deal in 2012.
Egyptian government-owned gas companies EGPC and EGAS were expected to foot the bill.
In response, Egypt’s Oil Ministry ordered the gas import talks frozen until after the case is appealed and the ruling is clarified, according to Bloomberg at the time.
Israel is set to become a major gas supplier with the discovery of a massive offshore field and has looked for regional buyers, including Jordan and Egypt.
Before 2012, Israel imported natural gas from Egypt, though the pipeline, running through the restive Sinai Peninsula, was dogged by frequent sabotage.
The deal, initially slated to last 20 years, was finally canceled by Egyptian authorities following the 2012 ouster of president Hosni Mubarak and election of Muslim Brotherhood president Mohamed Morsi. Morsi was ousted in 2014, and ties between Israel and Egypt, never warm, have steadily improved since.
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