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$15 billion gas deal: Warming of ties between Israel and Egypt?

Relations between Israel and Egypt are often referred to as a “cold peace,” but this week’s massive gas deal could be a sign of warming relations.

By Steve Leibowitz, World Israel News

Prime Minister Benjamin Netanyahu this week hailed the $15 billion deal for Israel to sell natural gas to Egypt as “historic.” According to the agreement, the private Egyptian consortium Dolphinus will purchase around 64 billion cubic meters of gas over 10 years from the Israeli offshore Tamar and Leviathan fields.

Energy Minister Yuval Steinitz has described the deal as the most significant export agreement with Egypt since the peace treaty that was signed in 1979.

A private business, not the government

Some opposition groups in Egypt have attacked the deal as a step toward “normalization.” President Abdel-Fattah al-Sisi defended the agreement on Wednesday, saying it fits in with plans to turn Egypt into a regional “energy hub” that imports and liquefies raw gas and then exports it. Al-Sisi stressed it was a private company that made the deal with Israel’s Delek Group Ltd. and Texas-based Noble Energy, not the Egyptian government. “It is a private business, but as a state we have nothing to hide,” he said.

Since al-Sisi became president of Egypt, there have been widespread reports of security ties between the two neighbors, especially regarding efforts to combat Islamic State terrorists operating in the Sinai as well as a sharing of intelligence.

Former Israeli Ambassador to Egypt Zvi Mazel told World Israel News (WIN), “This is not the first major energy deal reached between the countries. We signed agreements with Egypt in the 1980s, when private companies set up a refinery in Alexandria and Israel bought gas from Egypt. It ended when the pipeline was bombed by terrorists. Now we are supplying gas, but it’s not really normalization…

“This is a deal between tycoons. It’s useful for Israeli exports, but it will not change the  basic texture of relations,” he said.

‘A peace based on interests’

“There was some negative reaction in Egypt from the usual culprits who are anti-Israel,” Mazel added. “Some opposition parliament members have spoken out, and some lawyers tried to block the agreement in court. The government is simply saying that it is an agreement between private companies and not between countries. This agreement is very important for Egypt because they have two refineries on the Nile. They are buying more gas than they need and plan to become an energy hub by buying Israeli natural gas and converting it into liquid fuel that they will export to Asia and Europe.”

Former AP reporter Mark Lavie, who spent years based in Cairo, told WIN, “There is only one kind of ‘peace’ between Israel and Egypt, and it’s a peace based on interests. They need gas and we have gas. They have a problem in Sinai and we help. Often the cooperation is done quietly but this is a huge financial deal, so it came out publicly. There is some of the usual knee-jerk blow-back over Egyptian ties with Israel, but it rolls off al-Sisi’s back.”