Netanyahu says Egyptian move on gas just 'business'


ISRAELI AND Egyptian officials have played down the significance of the decision by Egypt to stop supplying gas to Israel, but Israel’s finance minister said the move cast a shadow over the peace agreement between the countries.

Mohamed Shoeb, the head of the Egyptian Natural Gas Holding Company, has announced that the company will terminate its agreement to provide natural gas to Israel, in response to what he said was “Israel’s repeated breaching of the agreement.”

Two Israeli officials travelled to Cairo yesterday for talks as Israel’s deputy foreign minister Danny Ayalon met at the foreign ministry in Jerusalem, with Egypt’s ambassador to Israel seeking clarifications on the cancellation.

Both sides went out of their way to stress that move was a purely economic decision, and Egyptian officials even offered to renegotiate a new deal.

Israeli prime minister Binyamin Netanyahu said the cancellation was the result of a commercial dispute. “We don’t see this gas cut-off as something that is born out of political development,” he said. “This is actually a business dispute between the Israeli company and the Egyptian company.”

Under the 2005 agreement, the largest commercial deal signed between the two countries, Egypt supplied more than 40 per cent of Israel’s gas supplies. However, the flow has largely dried up since Hosni Mubarak was forced from power in February 2011.

Since then, militants in Sinai have blown up the gas pipeline 14 times.

The gas deal was not part of the 1979 peace agreement, when Egypt became the first Arab state to make peace with Israel, but was based on a clause in the agreement under which Cairo promised to supply oil to its former enemy.

Israeli finance minister Yuval Steinitz voiced concern over both the economic and diplomatic implications.

“This is a dangerous precedent that casts a shadow over the peace agreements and the peaceful atmosphere between Israel and Egypt,” he said in a statement.

Opposition Leader Shaul Mofaz, from the centrist Kadima party, said the termination of the gas deal was a “blatant violation of the peace agreement and a new low in the relations between the two countries.”

Benjamin Ben-Eliezer from Labour, who as infrastructure minister helped to clinch the deal, said the Egyptian move was clearly political and another indication of a possible future confrontation between the two countries.