Israeli state power firm IEC has agreed to accept a knockdown $500mn in damages for Cairo’s unilateral halting of Egyptian piped gas supplies to Israel in 2012. The deal clears a key obstacle to the planned use of the same East Mediterranean Gas (EMG) pipeline to supply Israeli gas to Egypt from later this year.
The Geneva-based International Chamber of Commerce in 2015 ruled that Egyptian state firms EGPC and Egas should pay IEC $1.76bn in damages (MEES, 11 December 2015). But it proved a pyrrhic victory. As US-based Noble Energy and its Israeli partner Delek have clamored to use the mothballed route as a means of tapping Egypt’s market (and its under-used LNG liquefaction facilities) for their key Leviathan and Tamar discoveries offshore Israel, the key impediment has been IEC’s unpaid dues. (CONTINUED - 1805 WORDS)