More holdups for Israel’s gas exports to Egypt? A USD 1 bn lawsuit brought against the government by Thai state-owned energy company PTT Energy for allegedly failing to meet gas deliveries to Egyptian Mediterranean Gas (EMG) after 2011 could threaten to further delay exports of Israeli gas to Egypt, Jared Malsin writes for the Wall Street Journal. Egypt had previously made any gas export agreement with Israel contingent on settling a 2012 case by EMG shareholders that led to a USD 1.76 bn international arbitration ruling against EGAS, EGPC, and EMG. PTT’s case is largely based on the same claims as the 2012 lawsuit, over which Egypt reached a final settlement in June.

This constitutes more of a headache than a legal issue: An executive at EMG tells Malsin that the suit, the trial for which is set to begin on Tuesday, would be a “headache” for the two countries’ gas partnership, but “can’t legally jeopardize the flow of gas.” Delek executives had said earlier this year that they are interested in selling even more natural gas to Egypt beyond the agreed-upon amounts, but the question has been whether Israel’s pipeline network has the capacity to deliver the volumes already contracted.

Malsin also cites one analyst as saying security concerns in the peninsula could be a potential cause for delay, but does not clarify whether the Israeli exporters have expressed concerns over Daesh in Sinai.

Background: Delek and its US-based partner Noble Energy partnered together last year with other Israeli energy companies to form the Tamar Gas Consortium. The consortium then signed a USD 15 bn agreement to supply Alaa Arafa-led Dolphinus Holding with gas from each of the Leviathan and Tamar gas fields. Commercial sales of the gas should have begun by the end of June, according to a target Delek previously announced. Trial shipments were originally supposed to come in March, but capacity restrictions posed by Israel’s domestic pipeline network meant that the imports had to be delayed.