Israel Electric delegation heads to Egypt for gas talks

Jerusalem (Platts)--11Oct2004

A high level Israel Electric Corp delegation has gone to Egypt in an attempt
to advance natural gas talks, according to senior Israeli energy industry
sources. 

The talks have been bogged down in recent weeks over a number of
issues including a guarantee to be given by the state owned utility to the
East Mediterranean Gas Co. The Israeli team is headed by IEC president Yaakov
Razon. Last May, the IEC board of directors approved an agreement in principle
for the purchase of 1.7-bil cu m of gas annually for 15 years. EMG has
demanded a $180-mil guarantee for the construction of the marine pipeline from
Al Arishto Ashkelon off Israel's southern Mediterranean coast. But the IEC is
demanding the guarantee be conditioned on gas supplies from Egypt. Israeli
energy sources say that it will be difficult for the Egyptian side to make
further concessions on the issue of the guarantees and this could cause
difficulty in the final approval by the IEC board of the agreement. The IEC
negotiating team has set November 2004 as the target for completing the talks.

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