CAIRO: After repeated attacks have sabotaged the gas flow between from Egypt and Israel, shareholders of East Mediterranean Gas Company, the Cairo-based energy company that delivers natural gas to Israel, plan to take legal action against the Egyptian government, seeking for more than $8 billion in damages. The pipeline has been bombed four times since February, the first attack occurring during the time of the mass uprisings that toppled longtime Egyptian President Hosni Mubarak. The explosions have heavily interrupted gas shipments to Israel. Customarily, the pipeline provides about 40 percent of Israel's natural gas supplies. But since the attacks, it is said that even at times of quiet the shipments have only been able to offer 30 to 40 percent of the normal pipeline capacity. Nimrod Novik, an Israeli board member of East Mediterranean Gas Co., said the repeated bombings have led to economic deficits, caused severe crises in the Israeli energy market and “undermined Egypt's reputation as a reliable supplier.” Due to the supply outage, Israel Electric announced that they are prepared to search for alternative forms of energy to replace Egyptian gas. Uzi Landay, the Israeli Minister of National Infrastructures, said in an interview with Army Radio that the price of electricity in Israel could rise by 20 percent as the country turns to diesel and other more expensive fuels. “After four explosions this year, the decision-makers in Israel don't have any choice,” said Guil Bashan, an energy analyst at IBI-Israel Brokerage and Investments Ltd. in Tel Aviv, “As long as there is no regime in Egypt strong enough to stop the sabotage, Israel has to rely on its traditional fuels like coal, heavy oil and diesel.” Just two years after reaching a deal with Egypt on gas deliveries, the Israeli government stated that these attacks have the potential to further undermine their relations with Egypt. “This was an anchor, perhaps the most important element of our peace agreement with Egypt from an economic perspective and it is slowly, slowly eroding,” Landau said. The leaders of the popular uprising that ousted President Hosni Mubarak have strongly and openly condemned the Egypt-Israel gas deal. Although Israel asserts it is paying a fair price for Egyptian gas, Egyptian activists claim that Israel receives bargain prices and that Mubarak cronies skimmed millions of dollars off the proceeds. The attacks on the pipeline are believed to be a reflection of this popular discontent, but the exact source or factors of the attacks are not yet clear. On Tuesday, a pipeline terminal just south of the city of al-Arish exploded. Egyptian officials announced that there were no casualties. No one claimed responsibility, but dissatisfied Bedouin tribesmen in the area and Islamists opposed to Egypt's 1979 peace treaty with Israel have been suspected for attacking the pipeline. As Egypt faces the challenges of democratic transition, the relations between Israel and Egypt seem to be gliding on thin ice. Attacks such as these further exacerbate the potential of a deteriorating relationship. BM
