Egypt's Gas Pipeline (Photo: Reuters)
Egypt will appeal a ruling by the Geneva-based International Chamber of Commerce to compensate Israel Electric Corporation (IEC) and Eastern Mediterranean Gas company (EMG) with $1.7 billion and $288 million, respectively, plus interest and legal expenses, according to a statement by the petroleum ministry.
IEC and EMG resorted to international arbitration after attacks on the gas pipeline in North Sinai stopped the flow of gas they had received according to a 20-year agreement with Egypt.
In April 2012, Egypt stopped its gas sales to Israel, in a 20-year deal signed in 2005, following a year of sporadic attacks on the gas pipeline.
The Israel Electric Corp. demanded a compensation of $3.8 billion and the East Mediterranean Gas company which oversaw the deal demanded $1.5 billion, the statement read.
The Egyptian government will suspend negotiations between companies and freeze the issuing of permits to companies importing gas from Israel, announced the statement.
Egypt's privately-owned Dolphinus Holding signed a preliminary agreement with Delek Drilling and Avner Oil and Gas to import gas from Israel's Leviathian field when production begins in 2019.
State-owned Egyptian Petroleum Company (EGPC) and Gas Company (EGAS) will appeal the ruling in the courts of Switzerland through its legal consultant Shearman & Sterling LLP.