EGYPT CANCELS GAS DEAL WITH ISRAEL

TEL AVIV, Israel - In surprise move, Egypt pulls out of unpopular gas export deal with Israel citing economic reasons; Knesset opposition leader says move calls for 'immediate American response'; Israeli PM says Israel survives without Egyptian gas.
Egypt has unilaterally terminated its natural gas export contract with Israel, a shareholder in the export operating company, East Mediterranean Gas Company (EMG), said Sunday night.

• EMG told Ampal-American Israel Corporation, which owns a 12.5 per cent stake in EMG, that Egypt was ending the Gas Supply and Purchase Agreement between the two parties.
• “Egyptian General Petroleum Corporation [EGPC] and the [state-run] Egyptian Natural Gas Holding Company [EGAS] notified EMG that they were terminating the Gas Supply and Purchase Agreement between the parties,” the Ampal statement read.
• The company added that "EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal," noting that EMG, Ampal and EMG's other shareholders were "considering their options and legal remedies as well as approaching the various governments."
• In initial reactions by Israeli government officials to Egypt's decision,Yoval Steinitz, the Israeli minister of finance, expressed deep concern towards Cairo's unilateral decision.
• Steinitz told Radio Israel that the decision carries serious political and economic implications for the Camp David peace accords.
• Israeli Foreign Minister Avigdor Lieberman went as far as to suggest bolstering Israel's military presence along the Sinai border. "The Egyptian case is much more worrisome than the Iranian one," Ma'ariv daily quoted him as saying on Sunday.
• But Mohamed Shoeib, the CEO of EGAS, told Egyptian satellite CBC news on Sunday evening that "the decision we took was economic and not politically motivated. We cancelled the gas agreement with Israel because they have failed to meet payment deadlines in recent months"

The 20-year natural gas deal signed between Israel and Egypt in 2005 has been a pillar of Egyptian-Israeli economic cooperation following the historic 1979 peace treaty between the two countries.
Over the course of the last decade, Egypt has become a key natural gas producer, developing gas fields in the Mediterranean Sea. It began exporting liquid natural gas (LNG) in early 2005 to Israel as well as Jordan and Spain.

Source: Agency