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Monday, July 18, 2011     GET REAL

Natural gas supplier to sue Egypt over breach
of energy contract

LONDON — A regional natural gas supplier plans to seek $8 billion in damages for Egypt's failure to honor an energy contract with Israel.


The East Mediterranean Gas Co. (EMG) has been preparing for international arbitration for compensation from the Egyptian government in wake of five attacks on the Arab Gas Pipeline in 2011.

EMG, with shareholders in Israel, Thailand and the United States, said Egypt had failed to honor its obligation to supply gas to the Israeli energy market.

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Under the contract, arbitration would take place in a court in the United States. But EMG would be required to first try to settle claims directly with Egypt before turning to arbitration.

Nimrod Novik, a former Israeli official and member of EMG's board of directors, said the suspension of gas has turned Egypt into an unreliable energy supplier. Novik said EMG's claim has already been relayed to the government in Cairo.

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