New Egypt-Israel Gas Deal Signed

The Egyptian East Mediterranean Gas Company has signed a new deal to supply $2.1-3.3 billion of gas to Israel. The deal seals an agreement signed in 2007 in which the Egyptian East Mediterranean Gas Company (EMG) will supply the Israeli company Dorad Energy with 12.5 to 16 billion cubic meters of gas over 17 to 22 years. The estimated annual income from the sales is between $125-150 million. Dorad Energy plans to constructs to Israel’s largest private power station with a capacity of 800 megawatts, about 8% of Israel’s total installed capacity. The plant will be operational in 2010 and the company intends to sell the gas at a market competitive price. The export of Egyptian gas to Israel is highly controversial in Egypt, and as recently as April the Cairo Court for Urgent Cases overturned a ruling made by the Administrative Court to ban exportation of Egyptian natural gas to Israel. One of the main points of contention over the 2005 deal was the price that the Israel Electrical Corporation was expected to pay for the gas. According to some Egyptian estimations the country is losing $9 million daily due to price reductions given to the Israelis. Read on:
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