Daily News Egypt

Israel to consider renegotiating price of Egyptian gas - Daily News Egypt

Advertising Area




Advertising Area



Israel to consider renegotiating price of Egyptian gas

CAIRO: The Israeli government has set a three-week deadline to decide on an Egyptian proposal to renegotiate the price of exported natural gas, according to Israeli press reports. The Israeli Electric Company (IEC), which imports Egyptian gas from the Egyptian-Israeli consortium EMG, announced Tuesday it would consider an Egyptian request to renegotiate the price of …


CAIRO: The Israeli government has set a three-week deadline to decide on an Egyptian proposal to renegotiate the price of exported natural gas, according to Israeli press reports.

The Israeli Electric Company (IEC), which imports Egyptian gas from the Egyptian-Israeli consortium EMG, announced Tuesday it would consider an Egyptian request to renegotiate the price of the deal.

However the Israeli press reported that in the end it was the Israeli government that would decide whether to renegotiate, firstly because IEC is government-owned and also because the “state has a strategic interest in the supply agreement with Egypt, which is part of a broader diplomatic accord signed in 2005, according to Haaretz.

The new terms being sought would see a 40-60 percent increase in the price to $4-4.50 per million BTU (British Thermal Unit). The initial agreed upon price in the deal was $1.50 per million BTU.

In June the Egyptian press had reported – quoting an unnamed petroleum ministry official – that Egypt had increased the volume of gas exported to Israel after agreeing an increase in the price.

In July a new gas deal was announced between EMG and the Israeli company Dorad Energy subject to an agreement that was initially struck in 2007. The terms of the new deal were that EMG would supply around 12.5-16 billion cubic meters of gas to Dorad Energy over a period of 17-22 years at a cost of $2.1-3.3 billion, or around $4.5 per million BTU.

The gas deals with Israel have been met with vehement local opposition, especially because of the initially favorable price. The opposition was spearheaded by the popular campaign to prevent the export of Egyptian gas.

Ibrahim Zahran, the petroleum expert for the campaign, previously told Daily News Egypt, “The Egyptian people pay the difference [in gas prices], why are we subsidizing the Israeli consumer? How is that in our interest?

He added that Egypt sells gas to Syria for $5.25 per thermal unit because “Syria is our enemy apparently while Israel is our friend.

The popular campaign is not the only opposition to the gas deals. Last July, former Grand Mufti Nasr Farid Wassel said that exporting gas to Israel was religiously prohibited and called for a total economic boycott of the Jewish state.

“You cannot support a country that fights Islam and Muslims and occupies the land of Palestine. In fact you must cut all economic ties with it, he had said in a seminar in Alexandria the day after the deal with Dorad Energy was announced.

Topics: Investment

Advertising Area

Advertising Area



https://www.dailynewsegypt.com/2009/09/02/israel-to-consider-renegotiating-price-of-egyptian-gas/
Breaking News

No current breaking news

Receive our daily newsletter
Subscribe