Israel’s energy minister said on Sunday that an arbitration case with Egypt over a defunct natural gas deal could be solved in the coming months, but that the issue was not holding back cooperation in the sector.
In 2015, the International Chamber of Commerce ordered Egypt to pay state-owned Israel Electric Corp about $1.8 billion in compensation after a deal to export gas to Israel via pipeline collapsed in 2012 due to attacks by insurgents in Egypt’s Sinai peninsula.
Egypt appealed the decision and a final agreement has yet to be reached, though earlier this month Israel Electric said they were close to reaching an agreement in which Egypt would pay it $500 million over eight and a half years.
“I think there is already a final understanding, but it needs approval of the Israeli electric authority and maybe also of someone on the Egyptian side,” Energy Minister Yuval Steinitz said in an interview with Reuters. “Probably it’s an issue of a few months.”
In the meantime, Steinitz said, the dispute was not stopping Israel from expanding energy ties with Egypt, one of two Arab countries to have made peace with Israel.
Egyptian officials have said the arbitration could hold up commercial agreements.
Israel sees Egypt as a key market to export its newfound gas and a landmark $15 billion export deal is due to commence this year.
One Israeli company, Delek Drilling, is considering expanding its presence in Egypt by buying into liquefied natural gas terminals that would then export gas to Europe.
“There is no linkage, whatsoever, between this arbitration and Israeli and Egyptian energy cooperation and relations. We have no government control on such kind of commercial arbitration,” Steinitz said.
Minister: Egypt, Israel inch closer to resolving gas arbitration