The Associated Press
February 2, 2009
CAIRO: An Egyptian court suspended an earlier ruling that aimed at halting a much criticized deal to export Egyptian natural gas to Israel, pending further review, court officials said Monday.
In November, after opposition groups filed a suit alleging that the 15-year fixed price deal sold the gas too cheaply, an Egyptian court ordered a halt to exports.
The ruling was immediately appealed and at no time did the flow of Egyptian gas to Israel, which began in March, ever halt, said a spokesman for Israel's Infrastructure Ministry, Asaf Asulin.
Egypt's Supreme Administrative court on Monday suspended the November ruling, pending a review of the situation by a panel of independent experts, a court official reading from the court papers said on condition of anonymity because he was not authorized to speak to the media. A further hearing was scheduled for March 16.
The original court ruling said that the government needed parliament's approval before authorizing contracts related to the country's natural resources, but Cabinet spokesman Magdy Rady, said the government had full sovereignty over any deal with a foreign country.
"Contracts with foreign countries are part of the government's job. The government did it in a way that it deemed right," Rady said. "At this stage, this will help us to continue exporting."
The deal is between a private Egyptian company, partly owned by the government, and the state-run Israel Electric Corporation.
The 2005 deal licensed Cairo-based East Mediterranean Gas to sell 1.7 billion cubic meters of natural gas to the Israeli company at a price critics say is set at $1.50 per million British thermal units — a measure of energy.
Natural gas for March delivery was trading at about $4.31 per one million Btu Monday on the New York Mercantile Exchange. Over the past year, prices have been volatile, soaring at one point in June to $13 per million Btu.
Critics describe the deal was an example of government mismanagement of public funds and resources. The lawsuit also highlights popular resentment at Egyptian ties to Israel, despite more than 30 years of a peace deal.
Dozens of Egyptians demonstrated outside the court Monday, holding up pictures of Lebanese Hezbollah leader Hassan Nasrallah, carrying the title "the symbol of Arab resistance." Other posters were directed at government officials: "Stop the bleeding of natural resources."
Former diplomat Ibrahim Yousri, who filed the suit, said the decision is not final but the arguments will only drag on for months.
"I am very sad because that means that Egyptians will lose millions of dollars each day for no reason at all," he said.
Associated Press Writer Ian Deitch from Jerusalem contributed to this report