There has again been an explosion on the Egypt-Israel gas pipeline. At 5 am this morning an unexplained explosion was reported and the supply of gas was halted.

According to security sources in Egypt, the pipeline was attacked by an unidentified armed gang. The source said that "the pipeline supplies gas to Israel and Jordan, flames were coming up from the pipeline and the flow was stopped."

This is the second attack on the pipeline near El Arish in Sinai, about 30 kilometers from the Israeli border. The same source also reported that the residents living near the scene of the explosion fled the area due to the raging flames.

Sources in the energy sector in Israel confirmed the reports that the gas supply has been stopped. Israeli defense sources said that the area is poorly protected and it is therefore easy to conduct sabotage operations.

It is believed that the same group that attacked the pipeline in February 5 was also responsible for this attack. The group is probably made up of Bedouin or Palestinians from the El Arish - Rafia region who want to harm tourism to Sinai and harm Israeli-Egyptian relations.

After the pipeline was hit in February, the supply of gas was not resumed for 38 days after the Egyptian authorities announced and postponed renewal of the flow five times.

East Mediterranean Gas Co. (EMG) built the gas pipeline which commenced operations in 2008 at a cost of $460 million. Israeli businessman Yosef Maiman owns 20.6% of EMG through Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) and his private company Merhav MNF Ltd., and Israeli institutional investors own 4.4%. Hussain Salem owns 28% of EMG, Egyptian Natural Gas Holding Company owns 10%, and Thai energy giant PTT Public Co. Ltd. owns 25%.

Published by Globes, Israel business news - www.globes-online.com - on April 27, 2011

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