Egypt’s state-run gas companies have cancelled a 20-year deal to deliver natural gas to Israel, after the cross-border pipeline suffered numerous clashes throughout 2011 and 2012, cutting supplies.
The decision was revealed by Ampal-American Israel Corporation, a stakeholder in the East Mediterranean Gas Company (EMG), which runs the cross-border pipeline.
The firm said that the Egyptian General Petroleum Corporation (EGPC) and Egyptian Natural Gas Holding Company (EGAS) notified EMG that they were terminating the gas supply and purchase agreement between the parties.
Ampal said that the EMG considers the decision to terminate the agreement "unlawful and in bad faith" and demands its withdrawal.
The move ends a 2005 export deal that forms a major part of the 1979 peace agreement and had resulted in about $300m for Egypt in 2010.
Ampal said the company, including the EMG and EMG’s other international shareholders, are "considering their options and legal remedies as well as approaching the various governments".
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By GlobalDataThe Egyptian decision followed a dispute over damages caused by a series of blasts on the pipeline supplying Israel, via the Sinai desert region on its border.
