IEC Voids Egypt Gas Deal

The Israel Electric Corporation (IEC) cancelled its natural gas purchase agreement with East Mediterranean Gas Company (EMG) last month, the Israeli company said in its financial statement for 2012.

IEC said that this development is not likely to have any impact on the company “since the gas supply from Egypt for more than a year was only partial and irregular, due among other reasons to a series of explosions in the natural gas pipe from Egypt to Israel.”

The company is currently in the process of an international arbitration against EMG and the Egyptian Government gas companies, claiming compensation for the heavy damages incurred by the Company and subsequent damages arising from the continued violations of the agreements to supply natural gas entered between the Company and these entities.

The gas agreement was signed during the period of the Hosni Mubarak regime. Since the former president's ouster in February 2011, the pipeline from Egypt to Israel was sabotaged on more than a dozen occasions disrupting supplies.