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Egypt terminates Israel gas supply deal

Egyptian officials say they have cancelled an agreement to supply Israel with natural gas, following numerous sabotage attacks on the pipeline since the fall of Hosni Mubarak.

Egypt israel gas sinai explosion 11 10 11Enlarge
Egyptian security stand in the vicinity of flames following an attack by saboteurs on an Egyptian gas pipeline on July 12, 2011, at al-Arish in the north of the Sinai peninsula. (-/AFP/Getty Images)

Egyptian officials say they have terminated a deal to supply Israel with natural gas.

The announcement comes in the wake of over a dozen attacks aimed at sabotaging the cross-border pipeline and cutting supplies since an uprising last year deposed long-time Egyptian dictator Hosni Mubarak.

The energy supply deal has been a key part of agreements struck between Israel and Egypt, which in 1979 became the first Middle Eastern country to sign a peace accord with the Jewish state.

Israel gets around 40 percent of its gas supplies from Egypt, using it to generate electricity, according to the BBC.

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Ampal-American Israel Corporation, a partner in the East Mediterranean Gas Company (EMG), which operates the pipeline, said the Egyptian firms involved had told EMG they were “terminating the gas and purchase agreement,” Reuters reports.

The company added that it “considers the termination attempt unlawful and in bad faith, and consequently demands its withdrawal,” and said that EMG, Ampal and other international shareholders “were considering their options and legal remedies as well as approaching the various governments.”

Mohamed Shoeb, the head of the Egyptian Natural Gas Holding Company, told the Associated Press the decision to scrap the deal was made due to a breach of contact by Israel, which had not paid for its gas in four months.

Israel Foreign Ministry spokesman Yigal Palmor denied the claim. Officials have said the country risks facing summer power outages due to energy shortages.

Sources close to EMG told Haaretz: “Egypt does not understand what it is doing. This move will bring back the country – politically and economically – by 30 years. This is a breach of the peace agreement with Israel.” 

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http://www.globalpost.com/dispatch/news/regions/middle-east/120422/egypt-terminates-israel-gas-supply-deal