Egypt to Pay Israel $1.76B for Halting Gas Supplies

YERUSHALAYIM (Reuters) -
Fire rises during an explosion following an Israeli strike on the border tunnels between Egypt and Rafah in the southern Gaza Strip on November 21, 2012. To a backdrop of airstrikes and mounting casualties, American efforts to negotiate a cease-fire in the latest Gaza fighting between Israel and Hamas continued Wednesday. Photo by Abed Rahim Khatib / Flash 90
Fire rises during an explosion following an Israeli strike on the border tunnels between Egypt and Rafiach in the southern Gaza Strip on November 21, 2012. (Abed Rahim Khatib/Flash90)

Israel Electric Corp, Israel’s state-owned electric utility, said on Sunday that Egyptian natural gas companies will pay Israel compensation of $1.76 billion for halting gas supplies.

Egypt had been selling natural gas to Israel under a 20-year agreement, but the deal collapsed in 2012 after months of attacks on the pipeline by militants in Egypt’s Sinai peninsula.

Egypt Mediterranean Gas, the company that oversaw the gas deal, sued for $4 billion in damages, but an international arbitrator awarded Israel Electric $1.76 billion plus interest and legal expenses, the Israeli company said in a statement.

The company said it had suffered heavy damages after gas supplies were halted, forcing it to buy more expensive fuel to generate electricity and raising its costs.