Bloomberg News

Egypt Restores Gas Exports to Israel, Jordan, Operator Says

October 24, 2011

Oct. 24 (Bloomberg) -- Egypt has resumed exporting natural gas to Israel more than three months after a sabotage attack on the pipeline connecting the countries halted the flow, government officials said.

The North African nation also restored gas shipments to Jordan, Hassan al Mahdi, the chairman of pipeline operator Egyptian Natural Gas Holding Co., told reporters today in Cairo. Exports to Israel began at the end of last week, Israel’s Ministry of National Infrastructures said yesterday in an e- mailed statement.

Egypt suspended the flow of gas to Israel in July after saboteurs damaged the pipeline system transporting the fuel through the northern Sinai Desert. The attack on the link was the most recent of at least four this year. The supply to Israel will resume gradually, according to the ministry statement. Egypt holds Africa’s third-biggest gas reserves, according to data from BP Plc.

Prior to the latest bombing on July 12, Israel received about 40 percent of its gas from Egypt. Israel Electric Corp., the main buyer of Egyptian gas, used imported crude oil and diesel to make up the shortfall.

Shareholders of East Mediterranean Gas, which operates the pipeline to Israel, planned to take legal action against Egypt, seeking more than $8 billion in damages for the interruptions, Nimrod Novik, an EMG board member, said in July. Al Mahdi said Egyptian Natural Gas Holding hasn’t received notice of any arbitration against it by East Mediterranean Gas.

A separate branch of Egypt’s pipeline network that connects with Jordan, Lebanon and Syria suffered a separate attack on Sept. 27, near the northern Sinai city of El-Arish. Egypt is renegotiating terms of its supply contract with Jordan, which will pay a higher price for the same amount of fuel under the new deal, al Mahdi said. The contract runs until 2019, he said.

--With assistance from Calev Ben-David in Jerusalem. Editors: Bruce Stanley, Rob Verdonck

To contact the reporters on this story: Mahmoud Kassem in Cairo at mkassem1@bloomberg.net; Anthony DiPaola in Dubai at adipaola@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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