A court verdict ends the debate on gas exports to Israel but opens the door to other interpretations, reports Sherine Nasr The Supreme Administrative Court on Saturday endorsed Egyptian gas exports to Israel, annulling a previous verdict by a lower court and putting an end to a two-year public debate over the issue. The court made it clear that exporting gas to Israel was a sovereign issue based on a decision made earlier by the government and that it was not within the jurisdiction of the court to discuss governmental decisions. Nevertheless, the court stipulated that gas export prices and quantities should be subject to periodical reviews and a re-assessment and that local market needs should be fully met before export decisions are taken. In an initial reaction after the verdict, energy expert Amr Kamal Hammouda said the ruling strikes a balance between the government's right to conclude trade deals and the right of the independent opposition in society to investigate the validity and terms under which these trade agreements are concluded. "Concerning this agreement, some grave blunders can be underlined -- the huge amount of gas exported at a small rate and for extended periods of 15 to 20 years; and the absence of any adjustment clause to the basic agreement to be able to review prices in accordance with international prices," Hammouda said, adding that the price for exporting gas in the agreement is fixed to brent crude that should not exceed $35 per barrel, a condition that hardly suits the present prices. "I think the court's verdict has made it obligatory for both the government and the Ministry of Petroleum to set up a mechanism by which prices should be regularly reviewed and adjusted in accordance with the international market. Moreover, it makes it clear that future gas exports should not be concluded unless the local market demand is met. And this is a victory for the opposition," Hammouda said. But will the ministry or the government meet these two conditions, particularly in the absence of any mechanism to investigate future agreements or to follow up on current ones? "I doubt they will because the means to monitor gas export agreements do not exist." Nevertheless, Hammouda believed the new verdict would pave the way to negotiate better conditions in terms of pricing, quantity and period for export with the Israel side. "The terms for exporting gas to Israel should now be fully reviewed by members of the People's Assembly and the Shura Council, as is the case with other oil exploration agreements which must be approved by MPs first," said Hammouda, who further demanded an independent national committee to be composed of various authorities to review the terms of future agreements and follow up on price adjustments on present accords. Egyptian gas exports to Israel started in May 2008 after an agreement to supply 1.7 billion cubic metres of gas for the next 20 year was signed in 2005. The move triggered a battle led by a number of activists who accused the government of selling gas to Israel at a marginal price. Ironically, more agreements to sell gas were concluded with three Israeli private sector companies in 2009. The agreements were to sell approximately one billion cubic metres of gas for 10 to 15 years to each sector at a maximum of almost $3.3 per million British thermal unit (Btu), a better price when compared to the first agreement (the price ranged from $0.75 to $1.25) but hardly a compatible price to the international market where prices range from $9 to $12 per million Btu.
