Egyptian natural-gas exports to Israel and Jordan may be halted for as much as two weeks after an explosion damaged a pipeline in the Sinai Desert yesterday, Egyptian Oil Minister Sameh Fahmy told state television.
The incident at El Arish in the northeastern Sinai was an act of “terror” carried out by “foreign hands,” state TV said, while the Oil Ministry said a gas leak caused the blast. It may take one to two weeks to repair the pipeline, Fahmy told state TV in an interview late yesterday.
The branch of the pipeline that carries natural gas into Israel wasn’t directly damaged in the incident, the Merhav Group of Companies said yesterday in a text message. Merhav is an importer of Egyptian gas. About 40 percent of gas consumed in Israel is imported from Egypt.
The disruption to the pipeline has political and symbolic ramifications beyond the impact on fuel supplies to Egypt’s neighbors, particularly for Israel. President Hosni Mubarak’s 30-year rule has been shaken by almost two weeks of popular demonstrations, prompting questions about what political orientation a successor government might have.
Mubarak has warned that an early departure for him would leave Egypt, the first Arab country to sign a peace treaty with Israel in 1979, in chaos.
Israel’s Ministry of National Infrastructure said in a statement yesterday that it doesn’t foresee any interruptions to the country’s electricity supply.
Ampal
Billionaire Isaac Tshuva’s Delek Energy Systems Ltd., Ratio Oil Exploration 1992 LP and Avner Oil Exploration-LP are Israeli energy-related stocks that have climbed in recent days amid the unrest in Egypt.
Ampal-American Israel Corp., based in Herzliya, is Israel’s biggest supplier of natural gas.
The Sinai incident occurred on a part of the natural-gas network before it divides into branches serving Jordan and Israel, Marwan Bqaeen, head of the natural-gas unit at the Jordanian Energy Ministry, said in a telephone interview. Egyptian gas exports to Jordan may be halted for about a week, Petra news agency reported yesterday, citing Ghaleb al-Maabira, general director of Jordan’s state electricity company.
Egypt has halted gas supplies “as a safety precaution,” and Jordan has “resorted to back-up fuel,” Bqaeen said.
Egypt’s Reserves
Egypt has natural-gas reserves of 77 trillion cubic feet and is the main producer of the hydrocarbon in the eastern Mediterranean, according to the U.S. Energy Department. The country exported 650 billion cubic feet of gas in 2009, 30 percent by either the Arab gas pipeline to Jordan, Syria and Lebanon, or to Israel through the El-Arish-Ashkelon line, according to the U.S. department’s figures.
The line to Israel has operated since 2008 and can supply up to 7 billion cubic meters a year, according to Israel’s Department of Natural Infrastructure. Israel imported 60 billion cubic feet of gas in 2009, U.S. Energy Department data show.
Egypt supplies Israel with gas under a 15-year contract and is likely to eventually deliver almost 1 trillion cubic feet. Israel imports about 85 percent of its energy.
Israeli National Infrastructure Minister Uzi Landau said Feb. 1 that events in Egypt should heighten concern over the supply of natural gas to Israel, and the country should move quickly to develop its own gas reserves.
Jordan, which imports almost all its energy supplies, aims to increase imports of Egyptian gas for use in its power plants to 330 million cubic meters in 2011, from 240 million cubic meters last year, then Energy Minister Khalid Irani said in an interview on July 14.
Syria imported 679 million cubic meters from Egypt in 2010, making up about 8 percent of the country’s needs, according to government figures.
To contact the reporter on this story: Nayla Razzouk in Amman at nrazzouk2@bloomberg.net; Ola Galal in Cairo at ogalal@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
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