Egypt, Israel seek court action over gas contract

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, July 22 -- Shareholders in East Mediterranean Gas are seeking more than $8 billion in damages from the Egyptian government due to repeated attacks on a pipeline that have disrupted contracted supplies of natural gas to Israel.

Nimrod Novik, an Israeli board member of EMG, said the blasts have led to financial losses, caused serious problems in the Israeli energy market and "undermined Egypt's reputation as a reliable supplier."

Novik said, EMG reached a deal with Egypt 2 years ago that offered what he said were generous prices for Egyptian gas.

"Given that even this far-reaching price concession has not secured reliability of supply, the shareholders were left with no alternative but to seek protection” from the International Center for the Settlement of Investment Disputes, he said.

As part of the legal procedure, initial consultations among the parties are expected to take place in the coming weeks. But if no settlement emerges, the case would then go before the center’s judges.

However, Egypt’s Minister of Petroleum Abdallah Ghorab is threatening that Egypt will seek the cancellation of the current gas supply agreement with Israel and will demand a new price from Israel.

Egypt is reportedly preparing a request of its own to the International Centre for the Settlement of Investment Disputes, demanding that EMG raise the value of the gas agreement to $10 billion.

Earlier, however, Israel said the price it pays for gas is on par with international standards and that it will not renegotiate the price, which was already adjusted upward about a year ago.

Israeli energy officials say the Egyptian government receives more than $3/MMbtu from Israel.

"EMG's price is higher than that of any other Egyptian export venue, is better than other regional exporters receive and is in line with international prices," Novik said.

Meanwhile, a source cited by Egypt’s Youm 7 newspaper threatened that the attacks on the gas pipeline, which stretches to Ashqelon in Israel from Al Arish in the Sinai, will continue unless implementation of the agreement in its present format is halted.
The most recent bombing earlier this month was the fourth in 6 months, cutting off badly needed supplies during the hot summer months when Israelis' increased use of air conditioning sends electricity demand off the charts (OGJ Online, July 18, 2011).

EMG is owned by Egyptian businessman Hussain Salem, Egypt Natural Gas Co., Thailand's PTT PCL, EGI Chairman Sam Zell, and Yosef Maiman through Ampal-American Israel Corp. and his private company Merhav Ltd.

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

Noble Energy’s budget down 40% in 2015

02/20/2015 Noble Energy Inc., Houston, plans to spend $2.9 billion in 2015, representing a 40% reduction from 2014. The company also reported full-year 2014 n...

NGL Energy expands DJ basin crude pipeline to 200,000 b/d

02/19/2015 NGL Energy Partners LP will increase the capacity of its Grand Mesa crude pipeline to at least 200,000 b/d by using 20-in. OD pipe. Volumes committ...

Murkowski, Heitkamp lead Senate call for crude exports to Mexico

02/18/2015 US Sens. Lisa Murkowski (R-Alas.) and Heidi Heitkamp (D-ND) led a coalition asking US Sec. of Commerce Penny Pritzker in a Feb. 18 letter to encour...

BP Energy Outlook projects global energy demand to jump 37% by 2035

02/17/2015 Global demand for energy is expected to rise by 37% from 2013 to 2035, or by an average of 1.4%/year, due in large part to ongoing economic expansi...

Montana governor wants PHMSA to beef up pipeline enforcement in state

02/17/2015 Citing a Jan. 17 leak of 1,200 bbl of crude oil from a ruptured pipeline in eastern Montana, Gov. Steve Bullock (D) asked US Sec. of Transportation...

Derailed West Virginia oil train carried Bakken crude

02/17/2015

A large-scale cleanup and investigation have launched following the Feb. 16 derailment of a CSX crude oil train near Mount Carbon, W.Va.

Phillips 66 Partners to buy pipeline systems’ interests for $1 billion

02/16/2015 Phillips 66 Partners LP has reached agreement with Phillips 66 to acquire Phillips 66’s interests in three pipeline systems for a total of $1.01 bi...

Bear Head LNG exempted from 2012 Canadian environmental act

02/16/2015 Liquefied Natural Gas Ltd.’s wholly owned subsidiary Bear Head LNG Corp. received notice from the Canadian Environment Assessment Agency (CEAA) tha...

Alberta's premier seeks more North American energy integration

02/16/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance's po...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected