IDEALS

CAIRO, (Aug. 12, 2009) IPS/GIN – Opposition figures and political
activists have slammed a new deal to sell Egyptian liquefied
natural gas (LNG) to Israel at what they say are vastly reduced
prices.

“Egyptian gas is being sold to Israel at prices far below the
international average,” Ibrahim Yosri, former head of legal affairs
and treaties at the Egyptian Foreign Ministry told IPS. “This
agreement is proof that the ruling regime is unconcerned with
public opinion and is insistent on depriving the Egyptian public
of its rightful national assets.”

On Jul. 28, Egypt formally agreed to sell between 12.5 billion and
16 billion cubic metres of LNG per year to Israel for a period of
between 17 and 22 years. The Cairo-based Egyptian-Israeli energy
consortium Egyptian Mediterranean Gas (EMG) will supply the gas to
Israeli firm Dorad Energy for a total reported cost of between 2.1
billion and 3.3 billion dollars.

Given longstanding popular condemnation of Israeli policies,
particularly those relating to Palestinian populations in the Gaza
Strip and occupied West Bank, the deal also stirred political
controversy.

“It is absolutely forbidden that we support a country currently at
war with Islam and Muslims, and which occupies the land of
Palestine,” Nasr Farid Wassil, former Grand Mufti of the republic,
was quoted as saying in the independent press. “All economic
relations with such a country should be severed.”

Despite its unpopularity, the deal is not the first: under an
earlier energy accord, Egypt has been exporting LNG to Israel since
May of last year. Extracted from fields in Egypt’s northern Sinai
Peninsula, gas is pumped via submarine pipeline from the coastal
town Al-Arish to the Israeli port city Ashkelon.

The first accord, signed in 2005, allowed EMG to sell 1.7 billion
cubic metres of LNG annually to the Israeli state-run Israel
Electric Corporation for a period of 15 years. The sale price was
never officially disclosed, fuelling speculation by critics that
gas was being sold to Israeli buyers at reduced prices.

Egypt is one of the few Arab states, along with Jordan and
Mauritania, to have full diplomatic relations with Israel.
Nevertheless, bilateral cooperation has remained severely hampered
by popular disapproval of Israeli policies.

Over recent years, public opinion has hardened further against the
self- proclaimed Jewish state in light of the latter’s ongoing
blockade of the Gaza Strip, which shares a 14-kilometre border with
Egypt. The Egyptian public was outraged by Israel’s three-week
assault on the Gaza Strip December- January, which left more than
1,500 dead and more than 5,000 injured.

A popular campaign was launched in summer last year to oppose all
LNG export deals.

“Egyptian natural gas belongs to the Egyptian people, not the
government,” Mohammed Anwar Al-Sadat, former MP and spokesman for
the Popular Campaign against Gas Exports, told IPS at the time. “If
they’re going to sell it, they should at least sell it at
international prices.”

Formation of the popular committee was accompanied by a lawsuit
filed by Yosri and a number of political activists against export
of gas to Israel.

“All studies, official and independent, indicate that Egypt is in
dire need of its energy resources for its own future development,”
said Yosri. “What’s more, the current sales price is far too low.”

Last November, an Administrative Court ruled in favour of Yosri
and his co- plaintiffs. Citing lack of parliamentary approval and
the vagueness of the agreement, the court ordered a ban on export
of Egyptian LNG to Israel.

But the government filed an appeal, and Egypt’s Supreme
Administrative Court ruled in February to freeze implementation of
the earlier verdict, pending further deliberations.

Responding to claims that gas was being sold at less than
competitive prices, the government announced its intention to
revise the terms of the agreement. Petroleum Minister Sameh Fahmy
promised parliament in June that the government would “review all
gas export agreements to all countries, including Israel.”

Days after the new gas deal was signed, President Hosni Mubarak
announced that the government had “made revisions and amendments
of current gas contracts with all countries in order to maximise
profit for Egypt.” Quoted in the Aug. 4 edition of state daily
Al-Ahram, he stressed that “Egypt is not selling gas to Israel at
reduced prices, as some are claiming.”

But energy expert Ibrahim Zahran, member of the campaign against
gas exports, says the gas “was under-priced in the first deal, and
continues to be under-priced in the new agreement as well.

“The first deal laid down a price of 1.25 dollars per million
British thermal units (BTUs), compared to global prices of about
15 dollars per million BTUs,” Zahran told IPS. “Under the new
agreement, the price was raised to 1.75 dollars per million BTUs,
although international prices remain the same: Russia, for example,
currently sells gas to next-door Ukraine at 15 dollars per million
BTUs.

“At such vastly reduced prices, Egypt is effectively subsidising
Israel,” he added.

Final deliberations in the legal case are scheduled to begin at
the Supreme Administrative Court in October. Yosri says he will
challenge the terms of the new agreement as well.

*Not for publication in Italy.