Egypt-Israel gas pipeline attacked for 5th time this year

Saboteurs have struck the El Arish to Ashkelon natural gas pipeline for the 5th time this year, blasting a hole in the line near the al-Shulaq gas terminal.

Egyptian officials accused an extremist Islamic Bedouin group in northern Sinai for the attack, which came after private security staff of East Mediterranean Gas Co thwarted an earlier effort.

EMG buys natural gas from the Egyptian National Gas Co. for export to Israel via the El Arish to Ashkelon pipeline, which EMG built at a cost of $500 million.

The repeated attacks on the line have cut the gas supply from Egypt to Israel, with the Israel Electric Corp having to divert 500 million new Israeli shekels (NIS) ($145 million) to purchase emergency supplies of diesel fuel (OGJ Online, July 19, 2011).

In July, EMG shareholders were reported to be 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" (OGJ Online, July 22, 2011).

In the wake of the attack, analyst Business Monitor International said Egypt increasingly appears “unable or unwilling” to stop the disruption of supplies.

“The unpopularity of the gas supply deal between the two countries makes further attacks inevitable, suggesting it may be time for Israel to step up the search for other sources of gas,” BMI said.

The latest attack coincided with reports that Egypt's natural gas production rose by 6.1% in the first 5 months of 2011 to 19,363 tons compared with 19,056 tons during the same period in 2010.

Egyptian government sources said that the country’s domestic gas consumption in the first 5 months of 2011 increased by 4.8%, or 14,770 tons, over the 13,652 tons consumed during the same period last year.

Contact Eric Watkins at hippalus@yahoo.com

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