Egyptian-Israeli gas deal hits dead end
Negotiations in Cairo over a 15-year natural gas purchasing agreement with Israel have stalled. The Israeli delegation representing the Israel Electric Corporation (IEC) has returned home empty handed, reported Globes.
IEC was looking to purchase approximately 25.5 billion cubic meters of Egyptian natural gas, valued at some two billion dollars. The gas would be transferred through a pipeline running from El-Arish in the Sinai Peninsula to Ashkelon in Israel. The latest round of negotiatons hit a deadlock when IEC's board of directors rejected the Egyptian government's demand to provide bank guarantees worth up to $300 million for the pipeline.
A high-level Egyptian delegation visited Israel earlier this month to discuss the deal. Chairman of Egypt's national gas company EGAS, Mohammed Tawila, led the delegation.Tawila is also on the board of management of EMG, a joint Egyptian-Israeli pipe company that was awarded the Egyptian concession to export gas to Israel.
Egyptians and the Israelis have been negotiating natural gas cooperation since the early 1990s, but talks came to a grinding halt in 1996, in part because of the strained relationships that developed between Egypt and the government of former Israeli prime minister, Benjamin Netanyahu. Consequently, behind the scenes, third-party negotiations were stymied by policies of Israel’s then infrastructure minister and current prime minister, Ariel Sharon.
Contacts were renewed again in late 1999, when the Israeli government announced that Egypt had agreed in principle to sell natural gas to the Jewish state.
There is a high degree of sensitivity among Egyptians to any form of economic cooperation with Israel. Previous experiences have shown that cooperation between both countries has given material for opposition forces to shift the anger of the masses, initially protesting against the Jewish state, and then toward the government in Cairo. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
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