‘Egypt gas co. hires int’l law firm for Israel suit’

by
April 25, 2012

By OREN KESSLER, Jpost.com

The Egyptian gas company that canceled gas exports to Israel last week has hired an international law firm, Egyptian media reported Tuesday, after the Israel Electric Corporation threatened to take the case to international arbitration.

IEC said Monday it would take legal action against the Egyptian Natural Gas Holding Company (EGAS) and Egyptian General Petroleum Corporation (EGPC) for violating its gas supply and purchase agreement. Israeli officials say gas has not flowed from Egypt to Israel for much of the past year due to a string of attacks on the pipeline running through Egypt’s volatile Sinai Peninsula.

Speaking Tuesday to the state-run al-Ahram newspaper, EGAS CEO Mohamed Shoeib rejected Finance Minister Yuval Steinitz’s claim that the deal’s termination – which occurred Thursday but was revealed only three days later – could mark a breach of the Egypt-Israel peace treaty.

“This contract is between EGPC and EGAS in Egypt, and EMG – it is a commercial contract and the terms and conditions are clear,” Shoeib told the paper. EMG, East Mediterranean Gas, is the consortium of Egyptian, Israeli and international companies that oversees the bilateral gas trade since a 20-year-deal was struck in 2005.

“It is the right of the seller to terminate if the buyer fails to pay for four months,” Shoeib added.

Egyptian business executives close to EMG insist their Israeli counterparts had fallen behind on payments, and that the cut-off was purely a business-related move with no political implications.

On Monday Egypt’s Islamist-dominated parliament issued a statement saying it welcomed the deal’s termination.

The parliament “blesses the decision to stop exporting gas to the Zionist entity, and at the same time rejects threats uttered by some Israeli leaders,” the Muslim Brotherhood’s parliamentary speaker Saad al-Katatni said in apparent reference to Steinitz’s remarks.

“The parliament declares the Egyptian people will not accept these threats, and that Egyptians are standing hand in hand with the Palestinian people,” Katatni said. “We salute the souls of the martyrs who sacrificed their lives for our rights. We will not rest but will remain forever faithful.”

To read more, visit: http://www.jpost.com/MiddleEast/Article.aspx?id=267436

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