Israel’s government has approved to begin exporting natural gas from its Tamar site, along the Mediterranean coast, to Egypt at the capacity of up to 5bcm in the coming seven years, reported Reuters.
Israel’s Energy Minister, Yuval Steinitz said that “After years of delay and debate, we are starting to move forward and to position Israel as a regional natural gas power.”
Further, a source at the Petroleum Ministry told Egypt Oil & Gas that Egypt would continue appealing the international arbitration ruling, which had ordered Cairo to compensate Israel to the tune of $1.76b. The source stressed that all Israeli gas import negotiations were at a standstill for the time being, adding that despite that, Israel was declaring the gas trade arrangement for the third time, however, without meeting any of the preconditions outlined by Egypt for the terms of a final deal.
The first of Egypt’s conditions, in fact, is that all international arbitration issues be waived before entering into any negotiations with Israel. The source said that there were many countries more than willing to supply Egypt with gas, such as Russia. He explained that the negotiations were between companies, yet nothing would be adopted without a formal consent of the state over prices commensurate with the financial situation of Egypt’s economy, in addition to providing added value to the national economy.
Egypt had been selling gas to Israel under a 20-year deal, but the arrangement collapsed in 2012 after the pipeline in the Sinai Peninsula was exposed to insurgent attacks for months. In early December, the International Chamber of Commerce declared that Egypt owed Israel more than $2b in damages for the disrupted gas supply – a ruling the Egyptian government is appealing.