Middle East Economic Survey
VOL. LIV
No 18
2-May-2011
EGYPT
Egypt Gas Export Pipeline Closed After Second Bombing
Egypt’s gas export pipeline in the northern Sinai was closed on 27 April following an early morning attack by saboteurs. This was the third time the pipeline, which ships gas to Israel and to the Arab Gas Pipeline (AGP), was attacked and the second time it has been closed as a result of an explosion and fire. The first attack occurred at a metering station near al-Arish in early February during the uprising in Egypt that removed Husni Mubarak from power (MEES, 14 February). A second, unsuccessful attack was carried out near El Sabil on 27 March (MEES, 2 April). This latest attack also occurred near al-Arish. Officials from the Egyptian Natural Gas Company (Gasco) said it could take two weeks to repair the damage. Shipments to Israel through the offshore al-Arish-Ashkelon pipeline, and to Jordan through the AGP, had resumed in mid-March following a halt in shipments lasting about six weeks (MEES, 14 March).
Egypt’s Sinai pipeline has been in the past the target of disgruntled Bedouins in the region, but it has now gained the attention of militants who are opposed to Egypt selling gas to Israel, which now says that it must take steps to find alternatives to Egyptian gas. Israel is planning to arrange an offshore LNG delivery terminal that should come into operation in late 2012, and it anticipates gas arriving from the offshore Tamar gas field, which has reserves capable of meeting Israel’s demand for the next two decades, by the end of 2013. Meanwhile, Israel will use coal and diesel to generate electricity to make up the shortfall. Gas output from the Mari-B gas field is also expected to increase. Egypt, through the East Mediterranean Gas Company (EMG), an Israeli-Egyptian joint venture, supplies Israel with about 1.7 bcm/year or 40% of its gas demand. Jordan will also be forced to find alternative sources of fuel for power generation.
Copyright MEES 2011.
