For the first time, Prime Minister Ariel Sharon is intervening in the natural gas deal between Israel and Egypt. Sharon wants the government agencies involved in the deal to "submit for my review the draft gas contract with Egypt, before it is signed."
Sharon previously said he would not intervene in the deal, since it was a commercial contract between Israel Electric Corporation (IEC) and Eastern Mediterranean Gas (EMG), owned by the National Gas Company of Egypt (NATGAS), Egyptian businessman Hussein Salem, and Joseph (Yossi) Maiman. A ministerial team also decided not to intervene in IEC's commercial considerations.
In response to a question from "Globes", the Prime Minister's Bureau said the prime minister insisted that he had no intention of intervening in the commercial agreement. The Prime Minister's Bureau said, "The prime minister has instructed the parties involved in the matter to submit for his review the draft contract on natural gas between Israel and Egypt."
At issue is the draft agreement reached between Minister of Foreign Affairs Silvan Shalom and Egyptian officials. Former Minister of National Infrastructures Joseph Paritzky demanded that the commercial agreement between IEC and EMG be backed with a diplomatic agreement, in order to guarantee the supply of gas to Israel. EMG is due to supply $2.5 billion worth of natural gas to Israel over the next 15 years.
The Prime Minister's Bureau added, "The agreement between Israel and Egypt is not between this or that commercial company, nor is it intended to guarantee business interests. It is intended to formalize arrangements between the countries on all matters pertaining to the supply of natural gas. In any event, an agreement between Israel and another country is subject to the prior approval of the prime minister, the cabinet, and sometimes the Knesset as well."
Sharon's associate, former IEC chairman Eli Landau, strongly supported the agreement with EMG, and even told the IEC board of directors during a discussion on the matter, that the prime minister would be pleased if the board voted in favor of the deal. However, at the time, Sharon claimed that he would not intervene in the deal. Maiman and Sharon are longstanding friends.
IEC and EMG have not yet signed an agreement, but will probably do so in the coming months.
Sharon asked to review the draft binational agreement during a cabinet meeting that approved increasing the number of natural gas suppliers, in part by examining the feasibility of importing gas from Russia by Gazprom.
Published by Globes [online], Israel business news - www.globes.co.il - on January 5, 2005