CAIRO: In the wake of an Egyptian decision to halt the export natural gas to Israel, the shekel was set for its biggest decline in three weeks, according to Bloomberg business network. The currency dropped 0.3 percent to 3.7618 a dollar, headed for the biggest drop on a closing basis since April 3, in Tel Aviv. The Tel-Bond 40 index of corporate bonds fell for the first time in more than a week, declining 0.2 percent to 267.51. On Sunday, Egypt said it had scrapped the 2005 gas export deal with Israel – Israel generates 40 percent its electricity from natural gas, with Egypt providing 43 percent of its gas. The accord with the East Mediterranean Gas Company (EMG), which exports the gas to Israel, was cancelled as company failed to respect conditions stipulated in the contract. The contract with Israel has always been controversial in the Arab world's most populous and influential country. Mubarak's administration had repeatedly been challenged in the courts over secretive clauses in the deal, with opponents claiming Israel was paying below-market prices. “It was a popular demand to call off this treaty, as we export gas to them cheaper than market prices,” a private official in Egypt's oil ministry told Bikyamasr.com. “Their error was not to pay on time, and we have taken the opportunity to stop this shameful deal,” he added. The gas pipeline in Egypt's Sinai Peninsula, which had been used to supply gas to Israel and Jordan, has been blown 14 times since the overthrow of president Hosni Mubarak. Each time the pipeline has been blown, extensive delays in the gas export have followed. Israeli Foreign Minister Avigdor Lieberman voiced concerns over unilateral cancellation of natural gas supply agreement to Israel, calling Egypt “more dangerous to Israel than Iran.” Lieberman perceived the deal as a crucial commercial agreement that highlights Egypt-Israeli ties. According to The Times of Israel, he believed that the deal cancellation is commercial in nature and not a wider political split between the two countries. Lieberman's inflamatory statements have resulted in a request by the Egyptian foreign ministry to Israel for an explanation of the remarks.
