Egypt and Israel to settle gas arbitration in coming months
A resolution to the nearly USD 1.8 bn Egypt-Israel natgas arbitration case seems to be within arm’s reach, if statements from Israeli Energy Minister Yuval Steinitz to Reuters are anything to go by. “I think there is already a final understanding, but it needs approval of the Israeli electric authority and maybe also of someone on the Egyptian side,” Yuval said, suggesting that the case could be resolved in a few months’ time. Egyptian gas companies were ordered to pay the Israel Electricity Company (IEC) a USD 1.76 bn arbitration settlement after they reneged on a natural gas supply contract amid the tumult of 2011, but the IEC admitted to voluntarily writing off USD 1.3 bn of the payment earlier this month. The Egyptian government had made reducing the award a condition for accepting any gas agreement with Israel. This led to a settlement in November as Egypt and Israel concluded an agreement that will make Egypt a key customer for Israeli natural gas.
Cooperation in the energy sector is business as usual despite the pending case, the Israeli minister said. “There is no linkage, whatsoever, between this arbitration and Israeli and Egyptian energy cooperation and relations. We have no government control on such kind of commercial arbitration,” Steinitz said.