Egypt has agreed to pay Israel a $1.7 billion settlement in the arbitration case filed by the Israel Electric Company (IEC) against the Egyptian Natural Gas Holding Company (EGAS) and the Egyptian General Petroleum Corporation (EGPC), a government source told Al Borsa.
The IEC filed the case against the Egyptian companies after they halted natural gas exports to Israel in 2012. The countries signed a 20-year export agreement in 2005 but the Egyptian government was forced to stop shipments following attacks on the pipeline in Sinai province.
Under the terms of the agreement, Egypt will pay a reduced fine in stages when the natural gas pipeline linking the two countries begins operating. The settlement will be paid from the profits generated by gas transmission from Israeli gas fields to Egypt’s liquefaction facilities.
The International Chambers of Commerce in Geneva previously ruled in 2015 that EGAS and EGPC should pay the IEC $1.76 billion and the East Mediterranean Gas Company – the owner of the Ashkelon-Arish pipeline – $324 million.