Egypt refuses to back Israeli gas deal with state guarantee

Egyptian Minister of Petroleum Sameh Fahmy: "Egypt does not normally sign state agreements regarding natural gas deals." It now clear that the Egyptian government has signed state agreements regarding natural gas deals in the past.
A recent study by government officials from the Ministry of Foreign Affairs and other agencies, has found that the Egyptian government has signed agreements, backed by government guarantees, to export natural gas to several countries in recent years. Nevertheless, the agreement due to be signed by Israel Electric Corporation (IEC) and Eastern Mediterranean Gas (EMG), Israeli businessman Joseph (Yossi) Maiman, Egyptian businessman Hussein Salem and the Egypt National Gas Company, is not backed by any state guarantee.

In recent months, Minister of National Infrastructures Joseph Paritzky has been trying without success to obtain an Egyptian government guarantee for the IEC-EMG deal. Earlier, he asked Egyptian Minister of Petroleum Sameh Fahmy to sign a state guarantee for the deal. Fahmy replied that Egypt did not normally sign state agreements regarding natural gas deals. He would therefore not intervene in the EMG-IEC deal, which was a wholly commercial matter.
But it is now clear that the Egyptian government has signed state agreements regarding natural gas deals in the past. For example, in June 2002 in Jordan, Arab oil ministers signed an agreement of understanding to build a natural gas pipeline from Egypt to Jordan, Lebanon, Turkey, Cyprus and Eastern Europe. Most of the countries involved, Egypt included, signed the agreement.

At the same time, the oil ministers of Egypt, Jordan, Syria, and Lebanon decided to set up an Arab natural gas company with $ 200 mm in shareholders equity.
EMG stated in its response, "Last week, the highest officials in Cairo decided to back the deal with a guarantee for the entire period of the contract, on the basis of all the technical specifications. This guarantee will be signed by the Egypt National Gas Company, which is the senior department in the Egyptian Petroleum Ministry. The signature is backed by a government order granting it the status of a government guarantee. This decision was sent to both the IEC and to the highest officials in Cairo and to the relevant officials in Israel."