The Egyptian government has appealed a recent court ruling annulling a 2005 Egyptian-Israeli agreement for the export of natural gas to Israel. The court's ruling called for the freezing of the shipments on the basis that the deal was never approved by the Egyptian parliament. Furthermore, opposition to the deal objects to Egypt selling gas to Israel in light of the current situation in Gaza, especially at a reportedly below-market price.
Unsurprisingly, the Egyptian government has kept the gas flowing and has commented little on the issue, except to say that it would review the prices at which it sells gas to Israel. In addition, the government has denied responsibility for the deal, filing its appeal on the basis that the agreement is not a contract between the state of Egypt and Israel but rather between the Egyptian General Authority for Petroleum and Eastern Mediterranean Gas (EMG), a private energy consortium co-owned by Egyptian and Israeli interests.
Israel remains optimistic that the gas will continue to flow and that Egypt will honor the contractual agreement.
The Egyptian government will likely continue to ignore this issue until an appeals court hears the case on December 15, at which point if it does not win the appeal it will almost certainly find a way to circumvent the original ruling and continue pumping gas to Israel. The Egyptian government is not known for bowing to either judicial or domestic pressure except in the most extreme cases when the feeding of its citizens is concerned, and parliamentary opposition to the agreement will most likely remain marginalized. In fact, pro-government news sources have largely ignored the issue as they did when the agreement was first signed in 2005.
The Egyptian government continues to search for a way to interact with Israel on a political and economic level which is palatable to the “Egyptian street” as well as to various opposition groups including the Muslim Brotherhood, which holds significant sway over public opinion. Israel's recent withholding of fuel shipments to Gaza does not make this any easier. In addition to revenue from the gas sales, the Egyptian-Israeli export agreement represents an important step in the structuring of economic incentives for cooperation between the two countries. As Matthew has previously noted, Egypt and Israel share a number of mutual interests including the containment of Gaza and the need to engage with each other to some extent in the context of Israeli-Palestinian negotiations. The impact of Egyptian-Israeli economic cooperation remains to be seen.
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