Egypt: No More Natural Gas to Israel

Date posted: November 20, 2008

An Egyptian court has banned the export of natural gas to Israel. On May 8th Economy Arabia wrote:

بعد أشهر من الجدل حول صفقة الغاز الطبيعي المصري لإسرائيل، والانتقادات التي وجهت إليها، ونفي الحكومة المصرية مسؤوليتها عن الصفقة، بدأ أمس تدفق الغاز إلي إسرائيل. قالت شركة كهرباء إسرائيل إن الغاز الطبيعي المصري بدأ يتدفق إلي إسرائيل عبر خط أنابيب للمرة الأولي أمس الخميس، مؤكدة أن أكثر من ٢٠% من الكهرباء المنتجة في إسرائيل خلال العقد المقبل ستعتمد علي الغاز المصري. وأشارت إلي أنه في المرحلة الأولي سيسلم الغاز إلي محطات لتوليد الكهرباء في مدينتي تل أبيب وأشدود، وسيتيح لها زيادة إنتاجها من الكهرباء المولدة بالغاز. جاء تدفق الغاز تنفيذا لاتفاق تم توقيعه عام ٢٠٠٥ مع شركة غاز شرق المتوسط لتوريد ١.٧ مليار متر مكعب من الغاز سنويا، ولمدة ٢٠ عاما. كانت شركة غاز شرق المتوسط، التي أنشأها رجل الأعمال المصري حسين سالم، والإسرائيلي يوسف ميمان، قد قامت ببناء خط أنابيب تحت الماء لنقل الغاز المصري إلي إسرائيل وقال حسين سالم، في اتصال هاتفي مع «المصري اليوم»، إنه باع حصته في شركة «إي. إم. چي» المصرية ـ الإسرائيلية لشركتين أمريكية وتايلاندية منذ ٨ أشهر، ولم تعد له علاقة بالشركة أو بموعد تصدير الغاز المصري حاليا. ونفي ما يتردد عن أنه باع جزءا من حصته في الشركة للبنك الأهلي، مؤكدا بيعها للشركتين الأجنبيتين، لكنه رفض كشف اسميهما.
After months of debate about, and criticism related to, the Egypt-Israel natural gas deal and after the Egyptian Government dissociated itself from any responsibility relating to that deal, yesterday -Thursday – natural gas began flowing into Israel. The Israeli power company asserted that more than 20% of its electricity for the coming decade will depend on Egyptian natural gas. To honor the deal that was originally signed in 2005 with East Mediterranean Gas (EMG), Egypt will deliver 1.7 billion cubic metres of gas per year for the coming 20 years. The company is a joint venture between Egyptian businessman Hussein Salem and his Israeli counterpart Youssef Miman. Hussein Salem said in a telephone conversation with Al Masry Al Youm Newspaper that he sold his shares in EMG 8 months ago to an American and a Thai company whose names were withheld. He also denied selling his shares to the national Bank of Egypt.

On November 19, 2008 an Egyptian court ruled in favour of Ibrahim Yousri, a lawyer who said that Egypt is losing $9m for each day because of that agreement. Egyptian Chronicles wrote:

Ok this is a blow to the government , to Hussein Salem and to Israel. The judicial administrative court bans natural gas exports to Israel today. Now the Egyptian Government is obligated to listen to the court order or will they neglect it as usual?? More to come. I am very happy by the way.

And in a follow up post, she wrote:

Economically the Egyptian government made a huge mistake when it signed the agreement to export natural gas to Israel through Hussein Salem’s EMG Co. It is unacceptable to waste your natural gas for price less than the average price now especially prices are escalating and we are entering an energy crisis era. It is unacceptable to export your natural gas to Israel without the approval of the people represented in the Parliament. It is unacceptable to export natural gas to Israel when the people in Gaza got no fuel.

Then she quoted the basis of the court's decision as per the judicial administrative:

The oil ministry has broken the constitution and law with its agreement in 2005 to export natural gas to Israel for 20 years. According to article no. 123 in the Egyptian constitution “ The natural resources are considered a very valuable resources to be owned by the coming generations not only for the current generations and thus the administrative authorities before the exploit of these natural resources should go to the parliament to be grant the permission”

At the end of her post she concluded that:

… the regime could not dare and go to the parliament to get an approval because it knows very well the people would refuse it totally.

As for Israel's reaction, she wrote:

The Israeli Ministry of National Infrastructure expressed Israel's confidence that the political agreement between the countries' governments will remain in force in keeping with the memorandum of understanding the two countries signed in 2005!!  I also will quote their closing line in the same article in Haatrez : The court's ruling is subject to appeal in a higher administrative court and the Egyptian government sometimes ignores court rulings it does not like.

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