CAIRO: Egypt has halted the supply of gas to Israel since last Friday and has also cut back the supply to neighboring countries, the Israeli press reported Wednesday.
According to Haaretz newspaper, Egypt is struggling to cope with the demand on its gas exports and has scaled down the supply specifically to countries who are buying it at lower than market prices such as Israel and Jordan.
The contract between the two countries, being carried out by the Egyptian Israeli consortium Eastern Mediterranean Gas (EMG) is initially for 15 years guaranteeing a supply of 1.7 billion cubic meters a year at the price of $1.5 per million BTU (British Thermal Units).
“I hope this is happening for whatever reason, and this confirms what we have been saying in the campaign that we don’t have enough gas and that we should keep it for local use rather than sell it for cheap to Israel, Abdallah Helmy from the Popular Committee to Prevent the Export of Egyptian Natural Gas told Daily News Egypt.
The gas deal has been plagued with problems from the start whether due to local opposition or the amount of gas actually being pumped, a third of the stipulated amount according to Haaretz.
The newspaper attributed Israeli energy sources as believing that Egypt was unable to pump enough gas to satisfy local demand as well its contractual obligations and for this reason Egypt has decided to cut back on the deals it signed at lower prices, such as the ones with Israel and Jordan.
Several members of the committee were not aware of the almost week-long halt in exports, saying it’s probably due to a technical fault.
We don’t have enough gas, this is true, expert with the campaign Ibrahim Zahran previously told Daily News Egypt, Already 30 percent of electricity consumption in Egypt uses mazoot, which is more expensive than natural gas.
By 2011 Egypt will only have enough gas for exports, and not enough for local consumption, and by 2016 we will have to begin importing gas, he added.
That we stopped exporting gas for that reason though is untrue, because the agreement prevents us from doing so. This (halt) is due to a technical fault in the compressors and they are fixing it, Zahran said.
Helmy agrees. “I think the halt is a temporary one due to technical difficulties and Egypt will continue to supply the gas as it will not be able to halt production because of the potential fines it will incur, Helmy said.
Helmy added, “In this scenario Egypt will pay fines. We aren’t the ones pressuring now, the Israelis are pressuring [Egypt to get the energy supply stipulated by the contract] and their fines are not monetary but are comprised of supplying [additional amount of] energy whatever the price. This is in the contract and the government is hiding this.
“And this is worse because we must provide the specified amount of energy regardless of the cost, he added.
The Israel Electric Corporation, the beneficiary of the exported Egyptian gas, released a statement which said, “We have no doubt that Egypt will stand by the agreement it signed with the government in Israel, including the commercial agreement signed between EMG and Israeli customers. The ministry is in constant contact with government officials in Cairo.
EMG is a private energy consortium co-owned by Egyptian businessman Hussein Salem and the Israeli Merhav Group.
Officials from Egypt and Israel have held secret meetings to renegotiate the volume and price of the deal but talks have since broken down, Haaretz stated.
On Monday, an Egyptian court reviewing a petition by a group of lawyers to halt Egypt s natural gas exports to Israel asked the petitioners to present documents supporting their case and adjourned the hearings until Oct. 17.
Lawyer Ibrahim Yousri said the petitioners want to stop the deal because it involves below market gas prices of only $1.5 per BTU. The market price is almost nine times higher and Yousri said Egypt has been losing about $9 million a day over it.
If this not theft what else could it be, Yousri told The Associated Press. Egyptians are in dire need of every penny, so why does the government squander these resources?
