Monday, December 17, 2018

Egypt signs $15 billion gas deal with Israel


By Elizabeth Jenkins - March 09, 2018
TAGS:
Section: [Main News]
Tags: [trade and diplomatic relations]

On Feb. 19, Israeli company Delek Drilling signed a deal with the Egyptian company Dolphinus Holdings to provide Egypt with gas over the course of the next ten years.

Around 64 billion cubic meters of gas will be supplied from 2019 to 2029, in a deal worth $15 billion.

Egypt was the first Arab country to sign a peace treaty with Israel in 1979. However, relations with Israel have remained controversial.

The scale of the deal is significant, particularly in light of renewed commitment to the Arab Peace Initiative in 2017, which positions relations with Israel will be normalised in exchange for an end to the occupation of the Palestinian territories, including East Jerusalem.

Such a deal is symptomatic of ever-closer cooperation between the two countries. Indeed, in the Sinai Peninsula, Israel is assisting the Egyptian military to combat insurgency.

 

News of the deal provoked shock waves in Egypt, where two weeks earlier the Egyptian government had announced self-sufficiency by the end of the year due to the recent opening of Zohr gas field.

 

In Israel, Israeli Prime Minister Benjamin Netanyahu hailed the deal as “historic” on Twitter, stating in a video that the deal will “bring billions to the country, our security, our economy and our regional relationships.” He added: “But above all, it will strengthen Israeli citizens.”

Yuval Steintitz, the Israeli energy minister, said it was the most significant deal with Egypt since the Camp David accords.

Palestine Monitor asked Ghassan Khatib, former Palestinian Authority minister, what the Egyptian motivation behind such a deal might be.

Khatib pointed to the flailing economic situation in Egypt, where years of mismanagement have turned the country from net exporter to importer, in order to meet the needs of its growing population.

“Secondly,” Khatib noted, “the Egyptian government thinks that improving their relations with Israel would please and satisfy the US, which they need in many ways.” He listed the need for security, economic and political support.

When asked by Palestine Monitor whether the deal was symptomatic of a lessening of Arab leaders’ commitment to the Palestinian cause, Khatib was sceptical.

Security coordination between Arab countries and Israel is nothing new, he said. “There are several indicators from Arab countries including Saudi Arabia that they are still committed to the Arab Peace Initiative.”

 

However, Netanyahu reported on March 5, that with Saudi permission, Air India will soon begin direct flights between India and Israel, flying over Saudi Arabia.

In 2016, a Jordanian company signed a 15-year $10 billion gas deal, provoking wide scale protests across Jordan.

 

In the face of other priorities, it remains to be seen whether the Arab Peace Initiative will be honoured.

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