Egyptian gas supply out till end of month at least

"Youm 7": Repairs on the pipeline have not yet started.

Egyptian gas deliveries to Israel will not resume before the end of July at the earliest, the Egyptian media reports. "Youm 7" yesterday quoted Egyptian Natural Gas Company (Gasco) chairman Hassan al-Mahdi as saying that the spare parts and materials to repair the pipeline had arrived, but that the repairs have not yet started. The repair work is due to take about ten days.

Commenting on the flawed security of the pipeline, which has been damaged in four attacks since February, al-Mahdi said that gas deliveries would not resume until security measures to prevent future attacks are put in place. He said that Gasco had already installed iron gates and barbed wire fences around its facilities, and that it would install security cameras.

Disruptions in Egyptian gas deliveries are the main factor in the pending electricity rates hike of 12-20% in Israel. Deliveries to Israel had been running at only 25% of the contractual amounts, even when deliveries were being made.

Earlier this month, Israel Electric Corporation (IEC) (TASE: ELEC.B22) chairman Yiftach Ron-Tal said that IEC would not sue Egyptian natural gas supplier East Mediterranean Gas Company (EMG) for breach of contract because, "We'll all be retired before we see any money".

Al-Mahdi estimates the cost of the pipeline repairs at $20 million. He said that there were no plans to demand that Israelis share in the repair costs because the attacks occurred on Egyptian territory. EMG's pipeline to Israel has not been attacked, and all attacks so far targeted Gasco's pipelines in Sinai, which also carry gas to Jordan.

Egyptian gas deliveries were most recently halted on July 13, after at attack at El-Tawil, near El-Arish. An attack ten days earlier 80 kilometers from El-Arish halted deliveries for two days. The first attack occurred on February 5, halting deliveries until March 15, and the second attack on April 27, halted deliveries until June 10.

Published by Globes [online], Israel business news - www.globes-online.com - on July 25, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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