The historic court rule to overrule the controversial 20-year deal on gas exports to Israel has generated a wave of public satisfaction and increased concerns about the efficiency of strategies and pricing systems of the government
The ruling, issued by the Cairo-based administrative court on November 18th, gave more confidence to the popular masses that are against the gas exports to Israel and motivated them to bring more lawsuits to suspend exporting the Egyptian gas to other countries since they consider it as the future generations’ wealth, as they and believe that the country’s gas reserves are not enough for the local consumption, so “why should we unleash exporting it?”
Commenting on the court rule, Eng. Sameh Fahmy, Egyptian Minister of Petroleum, declared that he respects the judgment whatever it was and added that the government was not a party in the case as its role is limited to the sale of gas to the East Mediterranean Gas Company, which supplies gas to Israel through pipelines owned by the government.
While an official source at the Ministry of Petroleum assured that government’s appeal on the verdict, will be in favor of the government by 90%, noting that the contract between the Egyptian General Petroleum Corporation (EGPC) and the East Mediterranean Gas Company has recently been amended, so that it will be approved to the Ministers’ Council only, and not to the People’s Assembly.
Moreover, the source added that only 28% of the total amount which was agreed upon in the contract was exported. This counts for approximately 150 million cubic feet per day. However, there are negotiations between Israel and the East Mediterranean Gas Company to alter the price of gas to reach a suitable level, which expected to be 6.2 dollars (Btu).
Alternatively, Ramadan Abu Elella, Head of the Petroleum Department at the University of Alexandria, criticized the government’s appeal on the verdict adding that the government is not a party in the exporting deal since the agreement is between the East Mediterranean Gas company and the state-run Israel Electric Corporation and Ministry of Infrastructure.
“The one who have the right to appeal against the sentence is the East Mediterranean Gas Company, which the government will not supply it with gas according to the resolution, while the government can then terminate the contract by the force of the judge,” added Abu Elella.
On the other hand, Amr Kamal Hammouda, a petroleum expert, revealed that the oil verdict by the administrative court is considered a historic one, adding that it would really result in a political tension between the Egyptian and Israeli authorities.
“The economic development in Israel is currently to lift power, from 9 to 19 gigawatts by 2020. the Israeli strategy relies heavily on obtaining Egyptian gas over the next 15 years since the start of the signing of the treaty in June 19, 2005 in order to meet the fuel needs of Israel by 20%, develop the existing power plants and increase supplies of natural gas, which is a substitute for diesel and coal as gas is a clean and non-polluting energy,” stated Hammouda.
Hammouda highlighted that Egypt signed 18 agreements to export gas despite the inadequacy of the strategic reserve, explaining that the studies provided by experts as well as the British Corporation “Wood Mackenzie” have shown that the local reserves are not enough to cover these conventions, as the figures provided by the EGPC is far from reality.
“Egypt’s proven gas reserve is about 72 trillion cubic feet according to the EGPC, while the reserve in Egypt is no more than about 32 trillion cubic feet,” added Hammouda.
By Tamer Abdel Aziz