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Sunday, 24 April 2016

US mediates in Egypt-Israel gas dispute

US offering to mediate in Egypt-Israel gas dispute? The US State Department will apparently push Israel to drop an international arbitration ruling requiring Egypt pay USD 1.76 bn to Israel Electric Corp. for halted gas supplies in exchange for allowing Israel to export gas from Leviathan using Egypt’s infrastructure, sources tell Al Shorouk. The U.S. will also push American companies to invest more in Egypt’s oil and gas sector, the newspaper says. The State Department’s Envoy for Energy Affairs Amos J. Hochstein was in Cairo last Tuesday to meet Prime Minister Sherif Ismail and Oil Minister Tarek El Molla in a bid to broker the agreement, the newspaper reported. While the spin on the story is clearly for local consumption (Egypt wants Israeli gas to run through our two liquefaction plans), the visit could yet prove to be significant. Worth remembering: Two factors stand in the way of Egypt’s desire to emerge as a regional gas hub using Israeli gas: The arbitration award and an Israeli High Court decision striking down a key set of 10-year guarantees in the Israeli state’s contract with the Leviathan partners.

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