Egypt finalizing plan to raise gas export prices

Egypt is putting the final touches to a new deal on Egyptian natural gas exports to Israel, including a large increase in prices, Egypt's Petroleum Minister Abdullah Ghorab told reporters on Tuesday.

The original prices were below US$4 per million BTU (British Thermal Units), but the two sides later agreed on adjusting the price to between $4 and $4.5 per million BTU. However, some think that the new prices are far below world prices.

Ghorab said that the new prices could be as high as $7 per million BTU. He added that those countries that buy Egypt natural gas without contracts usually pay no less than $10 per million BTU.

In 2005, Egypt agreed to sell gas to Israel's Electric Corporation, and the exports began three years later, with the total amount due to be exported set at 1.5 billion cubic meters. At the time exports began in 2008, an Egyptian court ordered the suspension of natural gas exports to Israel amid public criticism that the price had been set below existing market prices.

In 2011, repeated sabotage attacks led to weeks-long shutdowns along the pipeline, which is run by Egypt's Eastern Mediterranean Gas Company.

Last week, Jordanian Minister of Information and Communications Technology Rakan al-Majali revealed that Egypt had rejected an offer from the Jordanian government to help secure the gas pipeline, which also exports gas to Jordan.

On October, Ghorab revealed that Egypt's proven natural gas reserves stood at 77.5 trillion cubic feet (2.19 trillion cubic metres). That figure is little changed from the 77.2 trillion cubic feet reported by the government in June 2009.

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