Subscribe to Print Edition | Thu., November 20, 2008 Cheshvan 22, 5769 | | Israel Time: 03:13 (EST+7)   Back to Homepage web haaretz.com Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate GA 2008 Travel Week's End Anglo File

Egyptian court orders halt to Israel's natural gas supply By Avi Bar-Eli Tags: natural gas, Egypt  A Cairo court yesterday ruled against an Egyptian government resolution to sell natural gas to Israel, and issued an injunction halting the supply. Legal sources in Egypt say however that the court did not put a timeline on its ruling, and meanwhile the gas continues to flow. Opposition members argue that the contract to sell gas to the Israel Electric Corporation is not legal, because it never underwent approval by the Egyptian parliament. Yesterday's court ruling follows a motion by private lawyers, asking that the contract with the Israeli utility be revisited. The Merhav group, which is the Israeli partner of Egyptian supplier EMG, stated that according to its sources in Cairo, the Egyptian government will be appealing the ruling within a matter of days. Meanwhile the supply continues normally and no change is expected, stated Merhav, which is controlled by Israeli businessman Yossi Maiman. Advertisement "The State of Israel is confident that the diplomatic agreement between Egypt and Israel will continue to exist, based on the memorandum of understanding the countries signed in 2005," stated the Ministry of National Infrastructures. A ministry spokesperson added that its faith in the commercial agreements signed between the Egyptian gas company and corporate clients in Israel remains unshaken. "We are confident that the supply of gas between Egypt and Israel will continue normally," the ministry stated. Those reassurances did not stop Delek Energy, a member of Yitzhak Tshuva's Delek Group and a rival gas supplier to the Electric Corp and to corporate Israel, from reminding Israel how risky it is to rely on Egyptian gas. Delek Energy is a member of the Tethys Sea Group, which sells gas extracted from an offshore field near Ashkelon. "The decision proves our argument over the years that when it comes to energy sources, Israel must do everything in its power to rely only on itself," Delek Energy stated. "Therefore, the government should encourage exploration for natural gas and oil within Israel's territory and coast." The Cairo court ruling roughly coincides with supply finally approaching the capacity to which the Egyptians had committed. The supply via a pipeline from El Arish, Egypt, to Ashkelon began in May, but has been stuttering, reportedly because of problems with the quality of the pipeline. Even when the gas did flow, capacity was a third of the volume stated in the agreement. Last week TheMarker reported that after a two-week supply hiatus, following a visit to Cairo by top officials from the National Infrastructures Ministry and Electric Corporation, the flow resumed in stages. The Egyptians promised to achieve full capacity by the begining of 2009. Egypt has blamed the supply issues on glitches in the conduction system from the gas fields. But industry sources suspect it's having a broader supply problem. It prefers to scale down the flow to its neighbors - including Israel - to which Egypt is committed to selling at pre-crisis prices. Meanwhile, Cairo has been making rumbles about reopening the terms of trade and raising the price. A month ago, EMG officially announced that it was negotiating with Cairo about the price of gas to Israel. Also, EMG has suspended negotiations to sell gas to other Israeli customers, until the relations between the two countries become clearer. However, about half a year ago, EMG bid in an Electric Corp tender for the supply of five billion cubic meters of gas over the next five years. Meanwhile, to meet its urgent needs, the Electric Corp has been supplementing its procurement with gas bought from the Tethys Sea Group - at a far higher price. Bookmark to del.icio.us   The King is dead Archeologists find new evidence for King Herod's tomb site. Al-Hasbara Israel launches Arabic YouTube channel to bypass Arab media.

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