Israeli Energy Minister Yuval Steinitz stressed that an arbitration case with Israel’s Western neighbor, Egypt, over a defunct natural gas deal could be solved in the coming months, and noted that the issue was not preventing cooperation between the two countries in the Energy sector.
Minister Steinitz referred to a 2015 decision by the International Chamber of Commerce, which ordered Egypt to pay state-owned Israel Electric Corp about 1.8 billion dollars in compensation after a deal to export gas to the Jewish State via pipeline collapsed in 2012 due to repeated attacks by Islamist terrorists in Egypt’s Sinai Peninsula. Cairo sought to appeal the decision – nevertheless, a final agreement has yet to be reached.
That said, earlier this month, the Israel Electric Corp announced that they were close to reaching an agreement, according to which Egypt would pay it some 500 million dollars over eight and a half years. In his words: “I think there is already a final understanding, but it needs approval of the Israeli electric authority and maybe also of somebody on the Egyptian side.”
Meanwhile, Minister Steinitz denied supposed threats by Egyptian officials of possible consequences, in which the arbitration could hold up other commercial agreements. The top Israeli Energy official insisted that the dispute is not linked to Israel’s efforts to expand its energy ties with Egypt. He said: “There is no linkage, whatsoever, between this arbitration and Israeli and Egyptian energy cooperation and relations. We have no government control on such kind of commercial arbitration between the Israeli electric company and its partners, its business partners.”
It is important to note that Israel views Egypt as a key market to export its newfound offshore gas, a fact that led to a landmark 15 billion dollars export deal, which is due to commence this year. In addition to that, one Israeli company called ‘Delek Drilling‘, is reportedly considering expanding its presence in Egypt by buying into liquefied natural gas terminals, that would then export gas to Europe.