Last Update 16:51
Monday, 21 October 2019

Israeli corporation to take legal action against Egypt over terminated gas contract

Israel's Electric Corporation to pursue legal means to secure financial compensation, following Sunday's decision by Egyptian petroleum and gas companies to terminate natural gas contracts with Israel

Ahram Online, Monday 23 Apr 2012
Views: 1256
Views: 1256

Israel's Electric Corporation (IEC) said it will pursue international arbitration against the Egyptian government in order to be compensated for the damage caused by terminating its gas contract with Israel.

IEC issued an official statement on Monday mentioning that it will be taking legal action against Egyptian General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Holding Company (EGAS) for the violation of its gas supply and purchase agreement.

Despite this, IEC indicated that its output would not be affected by the gas stoppage, as it uses fossil fuels to compensate for the loss.

"The events are not expected to have a material effect on the company's financial condition or on its cash flow beyond what has already been reported," said IEC.

Egyptian natural supply has been repeatedly interrupted since February 2011, as unknown saboteurs bombed the pipelines in Sinai 14 times.

"The company is using liquid fuels, which cost substantially more than Egyptian gas," the statement added.

Israel depends on cheaper Egyptian gas for some 40 per cent of its energy requirements.

In March, Israel's Public Utilities Authority said that electricity rates in the country will increase by 9 per cent starting April due to IEC's sharp increase in generating costs because of the shortage of the gas supply and the rise in oil prices.

Electricity prices in Israel have increased by over 20 per cent since the beginning of 2011. 

Short link:


Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 200 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.

© 2010 Ahram Online.