Militants Blow Up Egypt-Israel Gas Pipeline Terminal in a Predawn Attack
Masked militants blew up a terminal on the Egyptian pipeline supplying natural gas to Israel, forcing a halt in exports after the fourth such attack this year, officials and state media reported.
The terminal near the city of El-Arish in the northern Sinai peninsula was in flames after the pre-dawn blast, the state-run Middle East News Agency reported today, citing witnesses. An official at East Mediterranean Gas Co., the pipeline’s operator, said gas supply to Israel was halted at around 2 a.m. local time. He declined to be identified due to company policy. Israel Electric Corp. confirmed the stoppage in a statement to the Tel Aviv Stock Exchange.
“The most important economic aspect of the peace treaty between Israel and Egypt is slowly collapsing,” Israeli Minister of National Infrastructures Uzi Landau said of repeated attacks on the pipeline, in an interview on Army Radio.
Israel receives about 40 percent of its gas from Egypt, and the latest bombing may further strain relations between the countries, said Moustafa El-Husseini, an independent Egyptian analyst and author of “Egypt on the Brink of the Unknown.” Shareholders of East Mediterranean Gas plan to take legal action against Egypt, seeking more than $8 billion in damages for the interruptions, Nimrod Novik, an EMG board member, said yesterday.
Shares in Ampal-American Israel (AMPL) Corp., which owns a 12.5 percent stake in the export pipeline, fell as much as 6.7 percent to 2.90 shekels today in Tel Aviv. The share price was 2.96 at 3:15 p.m. local time. Ampal-American Israel’s stock has dropped 65 percent this year.
The price of electricity in Israel could rise by 20 percent as the country shifts to diesel and other more expensive fuels because of the supply outage, Landau said. Israel Electric said it is prepared to use alternative fuels to replace Egyptian gas, in the statement to the stock exchange.
“After four explosions this year, the decision-makers in Israel don’t have any choice,” said Guil Bashan, an energy analyst at IBI-Israel Brokerage and Investments Ltd. in Tel Aviv. “As long as there is no regime in Egypt strong enough to stop the sabotage, Israel has to rely on its traditional fuels like coal, heavy oil and diesel.”
Gas from Israel’s Tamar field in the Mediterranean Sea won’t be available until 2013. “They might be able to speed it up by a month or two but not by much more than that,” he said.
The latest blast struck a valve chamber along the export network, and Egyptian Natural Gas Co., the state-run operator of the national grid, was assessing the damage, the country’s Oil Ministry said by e-mail. It gave no further details.
The militants escorted a security guard, Mohamed Oudah, and his family away from the pipeline terminal at gunpoint before placing explosives at the site, according to the MENA report. Firefighters brought the blaze under control, state-run television reported.
The latest attack underscores the tension between Egyptian authorities and Sinai’s Bedouin population, which has complained of economic marginalization and police brutality since Egypt regained control of the region from Israel in 1982, said El- Husseini, the analyst and author.
Spiting the Government
“The attackers probably did it to spite the government,” he said in a telephone interview today from Cairo. “Egyptian governments have been dealing with Sinai Bedouin as spies to Israel, not as citizens.”
Egypt, the first Arab country to sign a peace treaty with Israel in 1979, holds Africa’s third-largest gas reserves, with 78 trillion cubic feet (2.19 trillion cubic meters), according to data compiled by Bloomberg. It exported 650 billion cubic feet of gas in 2009, of which 30 percent went through the pipeline to Israel or via a separate link to Jordan, Syria and Lebanon, according to the U.S. Energy Department.
The first explosion to damage the network occurred on Feb. 5, during the uprising against former President Hosni Mubarak, who resigned later that month. Attackers struck again on April 27 and once more on July 4.
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