A strong blast on the natural gas pipeline from Israel to Egypt in the northern Sinai occurred early this morning, Egyptian security guards reported. The blast, which occurred near El Arish, about 50 kilometers from Israel's border, is the sixth blast since President Hosni Mubarak's regime fell last February.
The latest attack will not affect gas deliveries to Israel, which were suspended after the previous attack in July.
According to the report, the pipeline has suffered extensive damage. Witnesses said the huge flames could be seen from afar. So far, it is unknown what caused the gas pipeline explosion and to what the extent it has been damaged. Egyptian forces have surrounded the damaged area, and the gas supplier has stopped the flow of gas.
No organization has taken credit for the attack, but Egyptian authorities are pointing their finger at extremist Islamist Bedouin groups in northern Sinai. Just one day before the blast, an exchange of gunfire between Egyptian forces and extremist Bedouin took place, in which five people were killed.
The recurring attacks have disrupted the flow of gas from Egypt to Israel, as well as to Jordan and Syria. Israel Electric Corporation (IEC) (TASE: ELEC.B22) announced in July that it needs NIS 3-3.5 billion in government monetary assistance to make up for the disruption of gas supply and the shift to alternative sources to create electricity (mainly diesel).
In a statement, East Mediterranean Gas Company (EMG) shareholder Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) said that an alleged terrorist attack damaged a pipeline at 2 am this morning. The pipeline is owned and operated Egyptian Natural Gas Company (Gasco). Ampal added that neither EMG's site at El Arish nor EMG's pipeline were damaged in the attack, but that Gasco customers, including EMG, cannot receive gas supply. Since the terrorist attack on a Gasco pipeline on July 12, Egyptian Gas Company (EGAS) has not delivered gas to EMG, which therefore cannot delivery gas to its Israeli customers.
Ampal, controlled by chairman Yosef Maiman, owns 12.5% of EMG. Ampal's share price fell 2.6% on Nasdaq yesterday to $0.32, giving a market cap of $18 million, and fell 1.8% in morning trading on the TASE today to NIS 1.18.
Published by Globes [online], Israel business news - www.globes-online.com - on September 27, 2011
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