EGYPT: Despite opposition, court affirms controversial exports of natural gas to Israel

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An Egyptian court overturned a ruling outlawing controversial sales of natural gas to Israel, but said the prices must match world markets.

While it ruled in favor of the government’s decision to export natural gas to Israel, the Egyptian Supreme Administrative Court found that prices and quantity of the gas sold to the Jewish state should not be discounted.

The decision handed down Saturday overturns a ban issued on gas exports to Israel by a lower court in November 2008 after a group of lawyers accused the government of pumping gas to Israel at rates lower than worldwide prices.

The Egyptian government appealed the 2008 ban and has continued to export gas to Israel, pending a legal review.

In its Saturday ruling, the supreme administrative court said, ‘it is not within the jurisdiction of the courts to hear appeals against the government’s decision to export gas to eastern Mediterranean markets, including Israel.’

The panel that issued the verdict added that the Ministry of Petroleum should take into consideration the minimum and maximum limits for gas prices in the international market rather than export to Israel at a fixed preferential rate.

Moreover, the sales should not conflict with Egypt’s financial and national interests, and local power and energy needs should be fulfilled before exporting in order to avoid any reductions in the country’s gas reserves, senior judge Mohamed Al Husseini said.

While some Egyptians opposed to the exports are calling the ruling a partial victory, Petroleum Ministry officials said they had started reviewing the prices of gas exported to Israel before Saturday’s decision.

Egypt has been supplying Israel with fuel since 2005, after privately owned East Mediterranean Gas signed a 20-year contract with state-owned Israel Electric Corp. to provide 5.6 billion cubic feet of natural gas a year.

It is believed that the deal is roughly worth $6 billion.

The exports have raised furious objections against the government. Many Egyptians oppose any normalization of ties with Israel regardless of the financial benefits.

However, the Supreme Court said, ‘oil and gas export treaties, and the Egyptian-Israeli 1979 peace treaty gave Israel the right to acquire Egyptian oil and gas like any other country.’

The ruling ends a long battle between the government and a group of concerned lawyers, as the Supreme Court’s verdicts cannot be appealed.

-- Amro Hassan in Cairo