Egypt settles arbitration case worth $1.75bn with Israel
The government reached an agreement to settle the international arbitration case filed by the Israel Electric Company against Egypt. The Egyptian Petroleum Corporation (EGPC) and the Egyptian Gas Holding Company (EGAS) were fined $1.75bn due to the suspension of gas exports in 2012.
A government source said that the agreement included a reduction in the value of the fine, which was decided by the International Chamber of Commerce in Geneva in 2015, in addition to the scheduling of payment to begin with the operation of the gas pipeline between Egypt and Israel.
He explained that the agreement has been on soft scheduling of fine to be paid from the proceeds of the gas line and the national network, which will transport and export gas from the fields of both Delek and Noble companies through the Damietta liquefaction plant.
The source stressed that the agreement is the result of the strength of Egypt’s position and Israel’s need for it because the gas produced from the Mediterranean has no path for export, except through Egypt and its national pipelines.
He pointed out that gas will be moved from the fields to Egypt by the first quarter of next year.
The source added that Egypt did not retreat from the conditions announced since 2014, and that the settlement of international arbitration cases and the achievement of the best economic return to the state, are the condition of the export of Israeli gas through Egypt.
The International Chamber of Commerce in Geneva in 2015 issued a decree requiring the Egyptian Ministry of Petroleum through the EGAS and EGPC to pay compensation to the Eastern Mediterranean Gas Company worth $288m, along with another ruling fining Egypt $1.7m to the Israeli electricity company.
The source pointed out that the Egyptian liquefaction plants are a major hub in the Mediterranean region for the export of 1.88bn feet per day of gas to the European markets, in addition to a national network for the transportation of natural gas within Egypt with a capacity of 9bn feet per day.
Egypt achieved self-sufficiency of gas domestically and total production rose to about 6.8bn cubic feet per day, compared to the market needs estimated at 6.3bn feet of gas per day.
