Egypt Compensation Ruling Jeopardizes Gas Exports
Market experts discuss the ramifications of the arbitration ruling that Egypt must pay Israel Electric Corp $1.8 billion.
“Egypt does not have $1.8 billion to pay Israel; if Israel wants the gas export contracts to be implemented, it must be willing to make some allowances,” said John Astrop, a senior source in the global gas and electricity market, after International Chamber of Commerce arbitrators ordered Egyptian gas companies to pay $1.76 billion compensation to Israel Electric Corporation (IEC) for the heavy damages it incurred after they stopped supplying gas.
In the months after Egyptian president Hosni Mubarak was overthrown, the country stopped the flow of natural gas to Israel following a string of attacks on the pipeline in the Sinai Peninsula and because it did not have sufficient reserves to answer the needs of the domestic market.