The Egyptians aren't exactly happy, to put it mildly, at Israel's recent discoveries of offshore natural gas. Egypt had hoped to sell most of their natural gas reserves to Israel. But they should have thought of that before. Israel was already prepared, two years ago, to sign a comprehensive agreement for the purchase of natural gas from Egypt, in a volume of hundreds of millions of dollars a year.
But the Egyptians refused, and suspended negotiations for the purchase of gas, for diplomatic and political reasons.
Meanwhile, Israel has discovered offshore gas expected to suffice for fifteen years, and can now hang Egypt out to dry. So much so, that the Egyptian President personally invited Minister of National Infrastructures Eliyahu Suissa for a visit, to persuade him to sign an agreement for the purchase of the gas.
The new situation found expression during today's meeting between President Hosni Mubarak and Suissa. Mubarak tried to treat the matter jokingly in response to a remark by Suissa. Suissa had said "the companies prospecting for natural gas in Israel say there is no need to negotiate with Egypt as there is sufficient natural gas for many years".
Mubarak responded by winking at Suissa: "Fine, so maybe we will be the ones to buy natural gas from you".
The United States is urging the Ministry of National Infrastructures to sign an agreement for the purchase of natural gas from Egypt. This emerges from a letter sent by US secretary of Energy Bill Richardson to Minister of National Infrastructures Eliyahu Suissa, in anticipation of his visit to Egypt. The Americans are worried that Israel may not sign an agreement with Egypt, following the recent gas discoveries in Israel.
Richardson writes to Suissa: "I am aware that Israel has recently discovered natural gas. I also understand that it will take a reasonable time to develop the gas sources, and to build a suitable infrastructure in order to bring the gas that was found offshore of Ashkelon onshore.
"Despite the discoveries, it is logical to seek further alternatives that will bring gas to Israel at earlier dates, such as the Egyptian alternative. I urge you to continue your efforts to bring natural gas from Egypt and to reach an agreement on the matter".
This is notably the first time that the Americans are seen to be pressuring Israel to purchase natural gas from Egypt. Richardson, in his letter, invited Suissa to visit the United States in June, in order "to promote a series of co-operative ventures between Israel and the United States, especially in the field of electricity. The United States is prepared to assist Israel in developing the regulatory structure of its natural gas sector".
It is reported that, a few days ago, Egyptian Minister of Petroleum Samekh Fahmy asked Richardson to pressure Israel "to sign an agreement for the purchase of natural gas from Egypt. This, in spite of the indications of commercial gas discovered offshore of Ashkelon".
According to Richardson, "the agreement between Israel and Egypt regarding gas will be an important element in the development of useful economic co-operation between the two countries".
Published by Israel's Business Arena on 13 April, 2000