"The Egyptian market is closed to Israel," said Prof. Uzi Rabi, director of the Moshe Dayan Center at Tel Aviv University at the "Globes" Finance and Capital Markets Conference yesterday. Tensions with Egypt have created economic absurdities, the best known of which is the cancellation of the gas supply contract to Israel by Egypt, despite its desperate need for foreign currency.
A second, but less well known, absurdity is in liquefied natural gas (LNG). Even as Israel and Cyprus are about to invest billions of dollars to build LNG facilities, Egypt has two facilities dying for customers. The LNG facilities at Damietta and Idku were built in the early 2000s to serve the country's natural gas industry. Egypt has double Israel's proven natural gas reserves.
However, the jump in Egyptian domestic gas consumption and the halt in investment in developing new gas fields have seriously damaged gas exports. Even in the peak year in 2009, Egypt's LNG facilities exported only 12.75 billion cubic meters of gas, while their combined production capacity is 17 BCM a year.
Egypt's political upheavals and the rise of Islamic political parties mean that there is zero chance that Israel could export its natural gas through Egypt's LNG facilities.
Published by Globes, Israel business news - www.globes-online.com - on May 10, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012