Israel’s state-owned electric utility Israel Electric (IEC) will receive a compensation of $1.76bn from the country’s natural gas companies for suspending gas supplies.
The Israeli news site NRG reported that originally IEC sued Eastern Mediterranean Gas Company (EMG) and Egyptian General Petroleum and Egyptian Natural Gas (EGAS) for over $4bn, but the sum was reduced after negotiations.
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The decision comes after an international arbitration procedure that took place between IEC and the Egyptian companies at the International Chamber of Commerce.
A deal, under which Egypt had been selling natural gas to Israel under a 20-year agreement, collapsed in 2012 following several attacks on the El Arish-Ashkelon pipeline by militants in the country’s Sinai peninsula.
In February 2011, the pipeline was first attacked by individuals called "saboteurs." Egypt used the pipeline to export natural gas to Israel.
Due to continuous explosions, the pipeline went out of commission and halted gas supplies.
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By GlobalDataThere were at least ten additional attacks on the pipeline later during the year.
Following the halting of gas supplies, Israel Electric said it had suffered severe damages and was compelled to invest more to buy fuel in order to generate electricity.
Image: IEC Tower, company’s headquarters. Photo: courtesy of Sambach
