Egypt Scraps Unpopular Israeli Gas Deal

Israeli Company Insists Attempt to Stop Sending Israel Gas a Violation of Peace Deal

by Jason Ditz, April 22, 2012

Israeli officials are expressing “great concern” tonight after Egypt announced that it is scrapping the existing gas supply deal with Israel. The head of Egypt’s national Natural Gas Holding Company insisted it was because the Israeli company, East Mediterranean Gas (EMG), hadn’t paid them in four months.

The gas imports from Egypt provide around 40 percent of Israel’s natural gas and are a key portion of their electricity generation. The deal has been unpopular in Egypt, with many accusing former ruler Hosni Mubarak of selling at below-market prices. The pipeline has recently been bombed a number of times by factions in Sinai.

EMG loudly condemned the move to halt gas shipments, insisting it was “a breach of the peace agreement with Israel” and that it was pushing for a government remedy. Israeli diplomats, however, say that the deal is just a business dispute and nothing to do with the relations between the Israeli and Egypt governments.

That didn’t seem to be treated as universally true in Israel, however, as opposition leader Shaul Mofaz (who recently took charge of Kadima over Tzipi Livni) condemned the move as a “blatant violation of the peace treaty” and demanded immediate US intervention to force Egypt to start selling them gas again.

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