Report: Egypt to Double Price of Israel-bound Natural Gas

Egyptian sources tell Al Masry Al Youm that the 2009 contract between Egypt and Israeli firm EMG allows the renegotiation of prices in the event international demand rises beyond an agreed-upon level.

Egypt intends to renegotiate its contract to supply Israel with natural gas, the Egyptian news paper Al Masry Al Youm reported on Thursday, adding that the Egyptian regime was seeking to double the price Israel is currently paying.

The Al Masry Al Youm report comes after gas flow from Egypt to Israel was cut for the second time in recent months last month, after the pipeline that carries natural gas from Egypt to Israel and Jordan exploded, in what local officials described as an act of sabotage.

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The incident prompted several senior Israeli officials to criticize Israel's energy dependence on Egyptian gas, urging the government to speed up the exploration of recently located natural gas reservoirs off of Israel's coast.

Egypt's gas deal with Israel has also come under newfound scrutiny following the toppling of former President Hosni Mubarak's regime earlier this year, with former energy minister Sameh Fahmy and six other officials ordered to stand trial on charges related to the agreement.

Speaking to Al Masry Al Youm on Monday, official sources claimed that Egypt was now obliged to reopen negotiations over the price Israel was paying for natural gas, citing rising international prices.

Egyptian sources indicated that the renegotiation was possible due to a clause in the 2009 contract between Egypt and Israeli firm EMG, according to which the price would be reviewed in case international prices rose over an agreed-upon minimum level.

According to some estimates cited in the Al Masry Al Youm, Egyptian officials would insist on a new price that would be close to double the price Israel currently pays.

In response to the report, EMG said in a statement that there was no contractual justification for a renegotiation of the price the firm pays, saying: "EMG has a good working relationship with the Egyptian national gas corporation, one in which both sides fulfill their contractual obligations, including timetables and updating prices."

The conditions for a price update, EMG said, "did not exist today," adding that it went "without saying that if the [Egyptian] national corporation invited EMG to a meeting, EMG would respect that request, but that does not signal our willingness to negotiate the price