Egypt terminates gas deal with IsraelEgypt has terminated its gas deal with Israel.
Finance Minister Yuval Steinitz said he viewed with "deep concern the unilateral Egyptian announcement over terminating the gas deal with Israel, both because of its diplomatic and economic aspects. This is a dangerous precedent that diminishes the peace treaty" between the neighboring countries.YNet adds:
Opposition leader Shaul Mofaz said he views the decision as a "blatant violation" of the 1979 treaty.
The 1979 Egypt-Israel peace treaty stipulates that Cairo is obligated to provide its neighbor with as much oil as it could pay for – the wording was later changed from oil to natural gas.
Still, a deal was not signed until 2005, and the $460-million pipeline inaugurated four years later.
Ampal-American Israel Corporation, a partner in the East Mediterranean Gas Company (EMG), which operates the pipeline, said the Egyptian companies involved had notified EMG they were "terminating the gas and purchase agreement."I guess now they have another item to add to that lawsuit.
The company said in a statement that the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company had notified them of the decision, adding that "EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal".
It said EMG, Ampal, which is controlled by Israeli businessman Yossi Meiman, and EMG's other international shareholders were "considering their options and legal remedies as well as approaching the various governments".
Before the sabotage, Egypt supplied about 40% of Israel's natural gas, which is the country's main energy source.
In October 2011 EMG took legal action against the Egyptian government's energy companies and filed an $8 billion lawsuit against the Egyptians, claiming they had breached agreements obligating them to supply natural gas to the company.
I would say that the Egyptian-Israeli peace treaty is doomed, and with it any semblance of stability in the region. But I'm sure that the Obama administration still considers getting rid of Egyptian President Hosni Mubarak an A+ move.
What more could go wrong?