EGYPT and Israel last week signed a long delayed $2.5 billion preliminary agreement on sales of Egyptian natural gas to Israel. The Egyptian oil minister, Sameh Fahmi, signed the 15-year deal in Cairo with the Israeli national infrastructure minister, Benjamin Ben-Eliezer. According to the agreement, Egypt will provide Israel with 1.7 billion cubic metres, or 60 billion cubic feet, of natural gas a year for 15 years. The gas will be transported via an undersea pipeline from the north Egyptian town of Al-Arish to the southern Israeli coastal city of Ashkelon. Since the pipeline still has not been built, the date has not yet been determined for when the gas will begin flowing to Israel. When asked at the signing ceremony when deliveries would start, Ben-Eliezer said, "I hope it is, as has been promised, in something like two years." A statement from Ben-Eliezer's office described the deal as a "government umbrella" for a commercial agreement due to be signed in August. There will also be an option to extend the deal for a further five years. The commercial agreement will be signed between the Israeli Electric Company (IEC) and the Israeli-Egyptian consortium East Mediterranean Gas (EMG), which is jointly owned by the National Egyptian Gas Company and the private Israeli company Merhav as well as Egyptian businessman Hussein Salem. Talks on gas sales began in the 1990s but due to the political nature of the agreement, it was held up by frosty relations between the two countries following the Palestinian uprising and withdrawal of the Egyptian ambassador to Israel in 2000. IEC, a state-owned utility, signed an agreement more than a year ago with EMG, a private Israeli-Egyptian company, to buy gas from Egypt. Egypt began exporting natural gas in July 2003 via an overland pipeline from Al-Arish to Taba on Egypt's Sinai peninsula and then underwater to the Jordanian port of Aqaba. Construction is scheduled to be completed by the end of this year to reach other Arab countries.
