Israel shrugs off impact of Egypt nixing gas deal (AFP) AGENCE FRANCE PRESSE) 04/23/12)
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Israel on Monday rushed to downplay the significance of Egypt
cancelling its gas export deal with the Jewish state, casting it as
a "commercial dispute" with no impact on their diplomatic ties.
"We don´t see this cutoff of the gas as something that is born out of
political developments," Prime Minister Benjamin Netanyahu told a
meeting of heads of the Israel Bonds fundraising organisation on
"It´s actually a business dispute between the Israeli company and the
Egyptian company," Netanyahu´s office quoted him as saying.
Foreign Minister Avigdor Lieberman said: "The deal to supply gas is
not part of the peace deal, but it is an important commercial deal
that was an expression of the stable ties between the states.
"The unilateral cancellation of the deal is not a good sign, and we
hope that this dispute will be resolved like any other commercial
dispute, without taking it to the political realm," Lieberman told
public radio from Azerbaijan where he is on a visit.
On Sunday, Egypt said it had scrapped the 2005 gas export deal with
Israel, which generates 40 percent of its electricity from natural
gas, with Egypt providing 43 percent of its gas supplies. The balance
comes from Israel´s own Yam Thetis offshore gas field.
The accord with the East Mediterranean Gas Company (EMG), which
exports the gas to Israel, was cancelled "because the company failed
to respect conditions stipulated in the contract," Mohamed Shoeib,
head of the state-owned Egyptian Natural Gas Holding Company (EGAS)
But a spokesman for Netanyahu insisted the agreement was still intact.
"The gas supply deal between Israel and Egypt has not been cancelled.
There is a legal dispute between Israeli and Egyptian companies,"
said spokesman Ofir Gendelman in a message posted on Twitter.
The contract with Israel, which signed a peace treaty with Egypt in
1979, has always been controversial in the Arab world´s most populous
Agreed under the administration of ousted president Hosni Mubarak, it
has been challenged in the courts over its secretive clauses, with
opponents claiming Israel was paying below-market prices.
It was the largest ever trade deal between the two former foes.
A pipeline in Egypt´s Sinai Peninsula, used to supply gas to Israel
and Jordan, has been attacked 14 times since the overthrow of Mubarak
in February 2011, with the latest attack on April 9.
Despite the Israeli government´s efforts to downplay the EGAS
announcement, some Israeli officials voiced concern that the
cancellation was yet another blow to the Jewish state´s worsening
relations with its southern neighbour.
Ties frayed after Mubarak´s ouster and deteriorated even further in
September when protesters stormed the Israeli embassy in Cairo.
On Sunday night, Finance Minister Yuval Steinitz said in a statement
relayed by Israeli media that the scrapped deal was "a dangerous
precedent that overshadows the peace agreements and atmosphere of
peace between Israel and Egypt."
By Monday, however, Steinitz had toned down his reaction, and a
statement from his bureau said he was "very concerned" over
the "economic aspects" of the cancelled deal, without commenting on
relations with Egypt.
Steinitz further noted in his Monday statement the importance of
increasing Israeli efforts to "fortify our energy independence."
Since the interruption of gas supplies following the fall of Mubarak,
Israel has been pushing for the speedy exploitation of several
recently discovered gas fields off its Mediterranean coast, which
could compensate for the loss of Egyptian gas and turn it into a net
"We have...the reserves of gas to make Israel totally energy-
independent, not only from Egypt but from any other source, and to
have Israel become one of the world´s large exporters of natural
gas," Netanyahu said on Sunday. "We´re quite confident on that
score." (Copyright © 2012 Agence France Presse. 04/23/12)
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