Israel's Electric Corporation to pursue legal means to secure financial compensation, following Sunday's decision by Egyptian petroleum and gas companies to terminate natural gas contracts with Israel Israel's Electric Corporation (IEC) said it will pursue international arbitration against the Egyptian government in order to be compensated for the damage caused by terminatingits gas contract with Israel. IEC issued an official statement on Monday mentioning that it will be taking legal action against Egyptian General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Holding Company (EGAS) for the violation of its gas supply and purchase agreement. Despite this, IEC indicated that its output would not be affected by the gas stoppage, as it uses fossil fuels to compensate for the loss. "The events are not expected to have a material effect on the company's financial condition or on its cash flow beyond what has already been reported," said IEC. Egyptian natural supply has been repeatedly interrupted since February 2011, as unknown saboteurs bombed the pipelines in Sinai 14 times. "The company is using liquid fuels, which cost substantially more than Egyptian gas," the statement added. Israel depends on cheaper Egyptian gas for some 40 per cent of its energy requirements. In March, Israel's Public Utilities Authority said that electricity rates in the country will increase by 9 per cent starting Aprildue to IEC's sharp increase in generating costs because of the shortage of the gas supply and the rise in oil prices. Electricity prices in Israel have increased by over 20 per cent since the beginning of 2011. http://english.ahram.org.eg/News/39996.aspx
