CAIRO: The Supreme Administrative Court ruled on Saturday in favor of exporting gas to Israel saying that the decision is the “sovereign decision of the state and a matter of national security.
This ruling overturns a former one by a lower administrative court in November 2008 to halt exports to Israel, a ruling that was never carried out by the government. A later ruling issued in February 2009 allowed exports to continue while the Supreme Administrative Court reviewed the previous ruling.
The court did say though that a review of the price at which the gas was exported was necessary, and that mechanisms should be put in place to ensure that local demand for natural gas was also being met.
The court canceled the directive number 100 for the year 2004 by the Minister of Petroleum that was the basis for the deal with Eastern Mediterranean Gas (EMG), the Egyptian-Israeli consortium that is selling the gas inside Israel.
The court ruled that the directive contained a number of procedural irregularities including the absence of a mechanism for periodic reviews and ignored the needs of the local market.
As such, members of the popular campaign against the export of natural gas to Israel proclaimed the ruling as a victory, because it cancelled the Minister’s directive and thus forced a reworking of the deal.
“The judge was shrewd, he separated between the decision to export gas and the conditions under which they can be exported, Abdallah Helmy from the campaign told Daily News Egypt, “now the government is forced to renegotiate the deal in a more transparent manner and at a better price.
Though Helmy admitted that some members of the campaign were against the export of gas to Israel on principle, he said the initial goal of the campaign was to protect local needs first and foremost and lobby for better prices on exports.
“After this ruling, the campaign has come to an end, he said, “though we will continue to scrutinize the government to see whether they implement the court’s decision.
Egypt’s natural gas is exported to Israel via the Egyptian/Israeli consortium EMG, a private energy consortium co-owned by businessman Hussein Salem and the Israeli Merhav Group. The gas is being exported to the Israeli Electric Company.
The deal was struck in a memorandum of understanding signed in 2005 between the two countries. The contract was initially for 15 years guaranteeing a supply of 1.7 billion cubic meters a year at the price of $1.5 per million BTU (British Thermal Units).
It was announced last July that a new 17-year deal had been signed between Egypt and Israel. The deal had been struck in 2007 and this time EMG would be supplying the gas to the Israeli company Dorad Energy.
The terms of the new deal stipulated the supply of 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.