Gas export deals to be reviewed by Egypt

Gas export deals to be reviewed by Egypt

Citing the MENA news agency Egyptian Prime Minister Essam Sharaf  has ordered the revision and review of all gas contracts Egypt agreed to with all countries, including Jordan and Israel.

PM spokesman Ahmed Samman stated that the revisions could bring Egypt an additional $3-4 billion in revenue.

Former contracts have come in for renewed criticism with critics pointing to the deals as an example of the cronyism prevalent in the former government which was toppled following 18 days of mass protests.

Agreements in 2009, an appendix to the 1979 Israel-Egypt peace treaty had Egypt supplying 25.5 billion cubic meters of gas over 20 years to Israel.

According to experts the agreement could be worth up to $6 billion, including options to increase quantities delivered. 

According to Egypt’s Foreign Minister Dr. Nabil el-Araby Article 8 of the peace treaty stipulates a mechanism allowing Egypt to change the price of gas it charges Israel. Although the price update in 2009 set a price of $4 per million British Thermal Units, the price of natural gas has since risen sharply in the wake of rising prices for oil and coal, the baseline for linking the price of gas.
In addition to Israel, Egypt supplies gas to Jordan and other Arab countries.