Egypt will pay Israeli Electrical Corporation $865 million over 14 months in compensation for non-supply of gas to Israel via the al-Arish-Ashkelon pipeline since February 2011; if deal is signed, it will open doors to the implementation of a number of other Egyptian-Israeli deals.

Lior Gutman, 05.21.16

Egypt and Israel are close to reaching a compromise deal over $1.73 billion owed to the Israel Electric Corporation (IEC) because of the non-supply of Egyptian gas to Israel since February 2011. According to a Bloomberg news agency report, Egypt will pay the IEC $865 million over 14 months.

The sum of the compensation was determined in arbitration hearings between the two countries, which lasted many years, following Egypt’s unilateral violation of its contract with the Israeli company.

In 2008, Egyptian gas started flowing through a pipeline from al-Arish to Ashkelon. But, in February 2011, during the “Arab Spring,” Egyptian president Hosni Mubarak was ousted from power and the pipeline was blown up. Thereafter, Egyptian authorities repaired it and gas began flowing from anew, but unknown attackers carried out additional and repeated bombings of the pipeline until it was permanently put out of service.

If indeed the compromise deal is signed, it will open the door to the implementation of a number of gas agreements between Israel and Egypt, which have been stalled for more than two years.,7340,L-4805805,00.html