Egypt to pay Israel $1.76 billion for halting gas supplies

Israel Electric Corp, Israel’s state-owned electric utility, announced Sunday that the Egyptian natural gas companies will pay compensation of $1.76 billion for halting gas supplies.

Egypt had been selling natural gas to Israel under a 20-year agreement, but the deal collapsed in 2012 after months of attacks on the pipeline by militants in Egypt’s Sinai Peninsula.

Egypt Mediterranean Gas, the company that oversaw the gas deal, sued for $4 billion in damages, but an international arbitrator awarded Israel Electric $1.76 billion plus interest and legal expenses, the Israeli company said in a statement, Reuters reported.

The company said it had suffered heavy damages after gas supplies were halted and that it was forced to buy more expensive fuel to generate electricity, raising its costs.