Yesterday's explosion and fire at a gas metering station on the El Arish-Ashkelon natural gas pipeline halted deliveries of natural gas from Egypt to Israel. East Mediterranean Gas Co. (EMG) shareholder Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) said that the fire has been put out, there was no damage to the pipeline, and that the company was now working on repairs. It said that EMG had been notified by Egypt's natural gas company, Egas, that gas deliveries should resume in a week.
Egyptian TV station "Al Arabiyeh" quoted Egyptian sources that the explosion was caused by a gas leak in the pipeline, not by terrorism.
Israel Electric Corporation (IEC) (TASE: ELEC.B22) VP Moshe Bachar told “IDF Radio" (Galei Zahal) today, "IEC is prepared for such scenarios. It takes us about an hour to switch production from natural gas to alternatives, such as coal, heavy industrial oil, and diesel. There is no concern of a disruption in electricity in Israel, even if gas deliveries from Egypt are halted completely."
Asked about possible effects on electricity prices, Bachar replied, "Rising costs for fuels and coal, partly because of the events in Egypt, will likely cause a 10-20% increase in [electricity] prices in the medium term, until the start of gas deliveries from Tamar in 2013."
Egypt's Minister of Electricity and Energy Hassan Younes said today that gas deliveries to Israel would be delayed for at least two weeks.
Published by Globes [online], Israel business news - www.globes-online.com - on February 6, 2011
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