Israeli gas imports suspension lawsuit: Another stumbling block to Egypt’s energy hub aspirations

Cairo Administrative Court referred on Tuesday a lawsuit demanding the suspension of the approval of natural gas imports from Israel, for violating the Egyptian Constitution and Law No 196 of 2017 regulating the gas market to the State Council Commissioner Authority (SCCA).

The lawsuit alleges that allowing natural gas imports from the “Zionist entity” endangers national security, carries a negative impact on the Egyptian economy, and threatens societal peace, which rejects normalisation Israel.

The lawsuit added that Israel stole Egyptian oil and gas during its occupation of Sinai. UN Resolution 3175 obliges Israel to compensate Egypt for exploiting its natural resources, more than 70bn cubic feet of natural gas. “Instead of importing gas from Israel, the Egyptian government should have claimed its rights for its stolen resources,” the lawsuit stated.

According Terrence Smith in The New York Times in January 1975, the captured Egyptian wells in the Sinai Peninsula, which Israel began to exploit immediately after seizing the territory, provided 50-60% of Israel’s annual requirements, the fields and the wells in the Gulf of Suez produced 75,000 to 85,000 barrels a day, according to Israeli officials.

Following a series of large-scale gas discoveries in the Eastern Mediterranean, the region has become a hotspot of international energy discussions. The region has confirmed reserves of about 2tn cubic metres of gas, plenty of export and regional cooperation scenarios are being studied, in all of which Egypt holds the keys to the Eastern Mediterranean’s gas future. It has the ability to proceed alone by exporting its expected gas surplus via its existing exporting infrastructure.

In February, two 10-year agreements, worth $15bn, to export Israeli natural gas to Egypt were signed.The agreements between Delek Drilling and Noble Energy—the operators of Israel’s largest natural gas fields Tamar and Leviathan—and the Egyptian company Dolphinus Holdings, will supply Egypt with 7bn cubic metres of gas annually. Half of the amount to be supplied annually will originate from Tamar field, which is already operating, and the other half will come from Leviathan field, which is planned to begin operating next year.

Many energy experts believe that the agreement was a sign that Egypt is becoming a real gas hub, and that the natural gas from the Egyptian, Israeli, and Cypriot fields will be directed to Egyptian LNG plants in Idku and Damietta for re-exporting.

Also in February, a preliminary agreement between Egypt and Cyprus was reached to extend natural gas transmission pipelines from Cypriot fields to Egyptian natural gas liquefaction plants.

Osama Kamal, an oil and gas industry expert and former petroleum minister, said that both Cyprus and Israel need Egypt, as it is provides a key avenue for exporting their natural gas.