Minister of National Infrastructures Benjamin Ben-Eliezer left for Cairo today to sign a diplomatic agreement with Egyptian Minister of Petroleum Sameh Fahmi backing up the natural gas deal between the two countries. The agreement constitutes an umbrella for the commercial agreement between Eastern Mediterranean Gas (EMG a partnership between businessman Joseph (Yossi) Maiman, the Egyptian National Gas Company, and Egyptian businessman Hussein Salem) and Israel Electric Corporation (IEC).
The Egyptian National Gas Company and EMG signed an agreement two weeks ago to export gas from Egypt to Israel. Egyptian gas companies Egyptian General Petroleum Corp. (EGPC) and Egyptian Natural Gas Holding Company (EGAS) signed an agreement to export gas from Egypt to Israel with EMG and the Egyptian National Gas Company. Under the agreement signed two weeks ago, EMG will ship gas to Israel for 20 years, the value of the deal is estimated at $14-28 billion.
EMG is in advanced negotiations with the IEC for the supply of 1.7 billion cubic meters (BCM) of gas over fifteen years, with a five-year option. The deal is worth $2.5 billion.
Ben-Eliezer said that signing the agreement, the first concrete result of the peace treaty between Egypt and Israel, tied the two countries to a long-term bind agreement. Gas will begin arriving in Israel within eighteen months.
”This is one of the most important projects, with far reaching economic consequences. Importing natural gas can generate a dramatic change and an economic revolution, as a result of a significant change in production inputs,” Ben-Eliezer stated. He added that the alternative of importing natural gas from Egypt was the best one, since it was extremely practical. Importing gas from British Gas is possible, but depends on diplomatic developments between Israel and the Palestinians.
Published by Globes [online] - www.globes.co.il - on June 30, 2005