Egyptian natural gas companies have been ordered through arbitration to pay the Israel Electricity Corporation $1.76 billion in compensation over a gas supply cut, the Israeli firm said Sunday.
Egypt’s petroleum ministry said it would appeal the judgement reached through international arbitration after Cairo annulled its contract with Israel in 2012 following a spate of bomb attacks targeting the pipeline in the Sinai Peninsula.
State-owned Israel Electricity Corporation had demanded more than $4 billion in compensation from Egyptian firms EGPC (Egyptian General Petroleum Corporation) and EGAS, saying the cut caused it to search for more expensive supply sources.
Israel had previously relied on Egypt for roughly 40 percent of its gas needs. Arbitration was held through the International Chamber of Commerce.
Following the 2011 ouster of Egyptian president Hosni Mubarak, militants regularly targeted pipelines in Sinai, repeatedly forcing a halt in gas supplies to Israel and Jordan.
Israel has since been working to exploit major gas discoveries off its coast in the Mediterranean and hopes to export to Egypt. The Egyptian petroleum ministry said it had ordered EGPC and EGAS to freeze talks on such purchases until the appeal is resolved.
