The head of the Egyptian Natural Gas Holding Company, Mohamed Shoeb, announced Sunday evening that the company will terminate the agreement to provide natural gas to Israel following a dispute regarding the transfer of funds, Egypt’s daily al-Ahram newspaper reported.
Mohamed Shoeb confirmed to the Associated Press that Israel had failed to honor its obligations under the contract and did not pay for the gas for months. Israel’s Foreign Ministry spokesman Yigal Palmor promptly denied that.
"It was a business and not a political decision," Shoeb added.
Under the deal between the Israeli Electric Company (IEC) and the Israeli-Egyptian consortium East Mediterranean Gas, Egypt will supply Israel through a maritime pipeline to the southern town of Ashkelon with 1.7 billion cubic metres (60billion cubic feet) of natural gas a year.
Therefore, Israel receives up to 45 percent of its gas from Egypt and the rest of its gas comes from the Yam Thetis group's field off Israel's southern Mediterranean coast.
In Egypt, presidential candidates Abdel Moneim Aboul Fotouh and Hamdeen Sabahi both stated their satisfaction with the turn of events.
“The Egyptian people do not want to export gas to Israel and the president must act according to their wishes,” said Fotouh.
“I hope this decision is permanent in order for Egypt to better guard its national resources,” said Sabahi on his Twitter account.
In Israel, Israel’s Energy Minister said that Israel has been preparing since the fall of Mubarak's regime for the possibility of the supply of gas from Egypt coming to an end.
The Israeli Finance Minister Yuval Steinitz expressed his "great concern" after the announcement, saying that it created "a dangerous precedent that casts a pall over peace agreements and peaceful relations between Egypt and Israel, Associated Press reported.
It is worth mentioning that the pipeline carrying gas from Egypt to Israel and Jordan was blown up 14 times since the Mubarak regime was toppled in February 2011.