Egypt General Petroleum Corp. VP Toni El-Wardani reported today that he had reached understandings with the East Mediterranean Gas Co. Ltd. (EMG) to raise the price of natural gas sold to Israel in line with world prices.
Israeli businessman Yosef Maiman owns 20.6% of EMG through Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) and his private company Merhav MNF Ltd., and Israeli institutional investors own 4.4%.
The agreement involves changing the price retroactively to 2008 and therefore requires approval by the Egyptian Supreme Court. In February 2010 the Egyptian Supreme Court annulled a previous ruling banning the export of Egyptian natural gas to Israel, saying it has no jurisdiction over cases of this kind which involve state sovereignty.
However, the court still demanded that the government set a mechanism to determine the amount and price of natural gas it plans to send abroad after national market needs have been met.
Egypt's Minister of Oil Abdullah Ghorab was interviewed yesterday on the subject of natural gas exports to Israel, which is a hot topic in Egypt at the moment. He claimed that Israel is paying $3 per BTU, which is "a price adjusted to average world prices."
Gas started flowing to Israel through a pipeline for the first time in May 2008 under an agreement signed in 2005 for the supply of 1.7 billion cubic meters a year over 20 years.
Published by Globes, Israel business news - www.globes-online.com - on April 13, 2011
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