An Israeli board member of the Eastern Mediterranean Gas Company (EMG) said that the "far-reaching" price concessions the company has given to the Egyptian government has not ensured a reliable gas supply to the Israeli energy market, the Oil and Gas Journal reported.

Nimrod Novik said that Israel has incurred serious financial losses due to the continuous shutdown of gas supply. Shareholders will consequently seek an US$8 billion in reparation from the Egyptian government.

Saboteurs in the Sinai Peninsula bombed the piplines that feeds gas to Israel and Jordan four times since the beginning of 2011.

Novik said that EMG will seek protection from the International Center for the Settlement of Investment Disputes. He explained that the company has reached a deal with Egypt 2 years ago that offered what he said were generous prices for Egyptian gas.

Israel gets about 40 per cent of its gas through EMG.

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.

The magazine also reported that Egypt is currently 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.

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.

Israel has responded earlier that the price it pays for Egyptian gas is at par with international levels and that it will not engage in any price negotiations which was already adjusted upward about a year ago.

"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.

The 20-year natural gas deal signed between Israel and Egypt in 2005 is one of the most important outcomes to emerge from the historic 1979 peace treaty.