The Higher Administrative Court gave the Egyptian government legal clearance to allow natural gas exports to Israel yesterday, cancelling a lower court’s previous verdict to stop exports.

The ruling capped a legal battle that caused public controversy, particularly focused on the price of gas sold to Israel, and reflected the cool nature of ties with the Jewish state despite a 1979 peace accord.

The Higher Court, an appeals court for cases involving the state, also ruled Egypt should monitor the price and quantity of its exports and ensure it met local energy needs before exporting.

“It is not within the jurisdiction of the courts to hear appeals against the government’s decision to export gas to eastern Mediterranean markets, including Israel,” said Mohamed Husseini, who chaired the court’s meeting.

The state’s decision to export gas to Israel was “sovereign,” he said.

The court also ruled Egypt should create a mechanism to set the quantity and price of its gas exports, and undertake regular reviews to make sure local markets were well-supplied before it sold gas abroad, the state news agency MENA reported.

Gas started flowing to Israel through a pipeline for the first time in May 2008 under an agreement signed in 2005 for the supply of 1.7 billion cubic meters a year over 20 years.

In November 2008, a Cairo court overruled the government’s decision to allow the exports after a group of lawyers filed a suit against the state, saying the Israelis were buying the gas at prices below the international level.

The Egyptian government is reluctant to reveal the price it receives for natural gas exports.
A court ruled in February 2009 that gas exports could continue pending a review of the November ruling although the government had ignored the verdict anyway.

Egypt exports gas to Israel and Arab states by pipelines and also ships liquefied natural gas (LNG) abroad. However, in 2008 it said it would not sign any new gas export contracts until 2010 in order to meet rising local demand.