Govt: Company may review gas prices if supplies to Israel continue

Negotiations with the East Mediterranean Gas Company (EMG) to review the price of gas exports to Israel will continue until a satisfactory agreement is reached, said Petroleum Minister Abdullah Ghorab.

Ghorab told Al-Masry Al-Youm that officials from the Petroleum Ministry and the Egyptian Natural Gas Holding Company (EGAS) have held a series of meetings with EMG to reach a new agreement.

The Minister of Petroleum declined to give further details on the progress of discussions, but said there are signs that EMG is inclined to engage in negotiations to amend the prices on the condition that natural gas continues to be pumped to Israel.

The minister said that resuming the experimental pumping of gas would bolster Egypt’s position in its discussions with Jordan – with whom it is also negotiating new gas prices – and EMG, since it proves Egypt’s commitment to its international agreements.

Egypt resumed pumping gas to Jordan on Thursday after supplies were suspended following a gas terminal blast on 27 April, Ampal-American Israel Corporation said.

Egyptian gas exports to Israel have long sparked controversy. Former President Hosni Mubarak’s regime has been accused of selling gas at extremely low prices to Israel.

Ibrahim Youssri, an international law expert, accused the Egyptian government of not being transparent enough on the issue of resuming gas exports to Israel. Youssri expected supplies to Israel to continue as a result of US pressure on the Egyptian government. He also said Israel's intention to resort to international arbitration is a bad decision, since the ruling would favor of Egypt.

He added that if he receives confirmation that Egyptian gas is being exported to Israel, he will work to have a previous ruling, one which ordered the suspension the exports, implemented. "If the Petroleum Minister opposes the ruling’s implementation, he will face a penalty for refusing to implement a court ruling,” he added.

Youssri added that Israel buys Egyptian gas for US$3 per thermal unit, but the international price is US$12.

Meanwhile, the Jerusalem Post reported that, because Egyptian gas supplies to Israel and Jordan face an uncertain future, Jordan is likely to import natural gas from Israel, which is progressing well with its Tamar natural gas field.

Jordan consumes around 3 billion cubic meters of natural gas annually, 80 percent of which it imports from Egypt.

The Tamar natural gas field is located 90km from Haifa and has around 8.7 billion cubic meters of gas. Analysts believe it is sufficient to satisfy Israel's local needs.

In April, the Egyptian government said it would review natural gas contracts signed with Israel and Jordan. Israel gets 45 percent of its natural gas from Egypt.

Following three months of negotiations, the Jordanian government agreed with Egypt to increase the price of natural gas. The two sides have agreed to set a fairer price before the end of June.

Translated from the Arabic Edition

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