Egypt/Israeli ’79 Peace Agreement in Dispute


Rev 6:3-4 NCV When the Lamb opened the second seal, I heard the second living creature say, "Come!" Then another horse came out, a red one. Its rider was given power to take away peace (prosperity, rest) from the earth and to make people kill each other (butcher, slaughter, to maim violently, in streets), and he was given a big sword (assassins sword, terrorist, loud, mighty, sore afraid).

Egyptian Natural Gas Holding Company (EGAS) has shut off 40% of Israel’s natural gas supply. The EGAS claims it has not been paid. Israel denies that claim and declares Egypt is in violating of the economic annex of their 1979 peace treaty.

The controversial gas deal was scrapped by the Egyptian owned company which buys gas from Egypt and sells it below market value to Israel. This treaty deal has been wildly unpopular in Egypt since it was backed by the deposed President Hosni Mubarak. The ruling military forces in Egypt have not commented on the cancellation.

Since the original agreement, the gas pipeline that supplies Israel and Jordon, has been bombed 14 times. Israel went without a natural gas delivery for 225 days in 2011. Gas deliveries have not arrived in Israel for 66 days so far this year and stopped completely after a pipeline explosion on March 5th. Natural gas shortages have caused Israel’s electric prices to jump more than a third and “rolling blackouts” could be a problem this summer in Israel.

Egyptian General Petroleum Corporation, a state own company announced they were “terminating the Gas Supply and Purchase Agreement”. The EMG who operates the pipeline itself, declared, “the termination attempt is unlawful and in bad faith. Consequently they demanded the termination withdrawn.”

So the business dispute continues. According to Ampal-American Israel Corporation, who operates the cross-border pipeline, they are considering their options and legal remedies as well as approaching the various governments.” AMPAL is already using international arbitration to try to get compensation for the supply shortages it has experienced since the Egyptian uprising.

Mohammed Shoeb, the chairman of Egyptian Gas, said they had scrapped the deal because EMG had failed to pay for the past several months. “It is a commercial contract between companies,” he added.

Foreign Minister Avigdor Lieberman of Israel announced on Israeli radio stations, “The cancellation of the agreement was not a good sign,” then he added: “We want to understand this as a trade dispute. I think that to turn a business dispute into a diplomatic dispute would be a mistake. Israel is interested in maintaining the peace treaty and we think this is also a supreme interest of Egypt.”

Egypt’s former President Mubarak as well as a close associate, Hussein Salem, (Co-owner of EMG) face criminal charges for their part in the 20 year gas supply agreement signed in 2005.

Israel asserts that the gas contract terms are fair but Egypt stated they have lost more than $714 million on the deal. The government sells gas to Egyptian companies for $4 per BTU. Turkey, Greece and Italy pay $7 To $10. Egyptian officials said the gas was initially sold to EMG at about $1.25.

“The big saying here in Egypt is that we are subsidizing the Israeli people while we are not subsidizing the Egyptians,” said Tamer Abu Bakr, the chairman of an Egyptian natural gas distribution company.


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