Egypt compensates Israeli company $500mn because of “gas cuts”

EgyWatch June 18, 2019

The Egyptian government and the Israeli Electricity Authority have signed an agreement to reduce the amount of compensation Cairo will pay as a result of gas cuts to Tel Aviv, from $ 1.8 billion to $500 million.

Egyptian gas supplies to Israel were cut off more than six years ago due to attacks on the carrier gas pipeline in the Sinai Peninsula.

The Egyptian General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Holding Company (EGGC) said in their statement that the agreement provides for a fine of eight and a half years.

Egypt will pay $60 million in advance, $40 million six months after the agreement is signed, and the remaining $25 million will be paid every six months after that.

In 2015 the International Chamber of Commerce (ICC) ruled that Egypt must pay $1.8 billion in compensation to the Israeli electricity company because of the disruption of gas supplies.

In February 2018 the Israeli company Delek signed an agreement to supply 64 billion m3 of gas to the Egyptian company Dolphinous over a period of 10 years, worth $15 billion.

The director of the Israeli company said on June 2 that he hoped to start selling natural gas to Egypt by the end of this month.

Israeli officials described the contract as “the biggest deal signed by the Israeli and Egyptian sides since the 1979 peace agreement.”