The situation in the Palestinian lands has led to shelving a gas deal between Egypt and Israel, according to a report by New York Times Friday.
The Jerusalem Post quoted the report as saying that the Israeli gas market is off limits as long as the Israelis and the Palestinians remain at odds.
However, Egypt continues to sell oil to Israel as it has done for two decades.
"We want to diversify our markets," said Hamdi Abdel Aziz, a spokesman for the Ministry of Petroleum. "Egypt has the advantage of its geographic position and political stability," not to mention 53 trillion cubic feet of reserves, about 1 percent of the world total.
The geography of the region makes exporting to other nations in the Middle East, like Lebanon and Syria, a questionable proposition, said the report.
It said that building a pipeline without crossing Israeli territory is being studied but would be expensive. It is also not clear if any of the countries surrounding Israel can buy enough gas to make a pipeline worthwhile.
Before the Palestinian violence flared last September, plans to sell gas to Israel were gaining momentum.
In December 1999, the Israeli prime minister, Ehud Barak, announced an agreement to import gas through a pipeline to be built to Israel from gas fields near Al-Arish in the north Sinai by 2002.
This spring, the Israel Electric Corporation announced a 10-year contract to buy gas worth $300 million a year from Egypt. The deal, Egypt's first major export sale, would supply fuel for about 15 percent of Israel's electrical power, according to the report, adding that the current crisis is hindering such plans.
“Every violent new turn in the Israeli-Palestinian conflict makes it more difficult for Egypt to deal with Israel because of strong Palestinian sentiment among Egyptians.”
Work on the pipeline has yet to begin, as both countries wait for a calmer climate. According to the Post, trade in general between the two countries dropped sharply in the first quarter compared with the period in 2000, especially Egyptian imports from Israel, which fell by nearly half – Albawaba.com
© 2001 Al Bawaba (www.albawaba.com)
