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Egypt, Israel sign 15-year $2.5 billion natural gas deal

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    Egypt, Israel sign 15-year $2.5 billion natural gas deal http://www.haaretz.com/hasen/spages/594598.html By Amiram Cohen and Agencies CAIRO - Egypt and Israel
    Message 1 of 1 , Jul 1, 2005
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      Egypt, Israel sign 15-year $2.5 billion natural gas deal
      http://www.haaretz.com/hasen/spages/594598.html
      By Amiram Cohen and Agencies


      CAIRO - Egypt and Israel yesterday signed a long-delayed $2.5 billion
      agreement on sales of Egyptian natural gas to Israel, underscoring improved
      ties between the two countries.

      Egyptian Oil Minister Sameh Fahmy signed the agreement in Cairo with visiting
      Minister of National Infrastructure Benjamin Ben-Eliezer, who earlier had held
      talks with Egyptian President Hosni Mubarak.

      Under the 15-year deal, Egypt will sell 1.7 billion cubic meters of gas a year
      to the Israel Electric Corporation (IEC) starting in October 2006 - a total of
      about 25 billion cubic meters, Israeli officials said last week. There will be
      an option to extend the deal for a further five years.

      But Ben-Eliezer, asked at the signing ceremony when deliveries would start,
      said, "I hope it is, as has been promised, in something like two years."

      "This is a historic day because ... this will be the best indicator to show
      everyone that the peace between Israel and Egypt is solid," he said.

      State-owned IEC approved an agreement more than a year ago with Eastern
      Mediterranean Gas EMG, a private Israeli-Egyptian firm, to buy gas from Egypt.

      Talks on gas sales had begun in the 1990s, but the essential political
      agreement was held up by frosty relations between the countries.

      Relations have improved as Israel prepares to withdraw from the Gaza Strip.
      Egypt brokered a cease-fire declared by armed Palestinian organizations in
      February.

      Over the next year and a half, EMG will build a gas pipeline from Egypt to
      Ashkelon.

      At yesterday's meeting, Mubarak and Ben-Eliezer agreed that the two states
      would initiate additional joint economic projects, to strengthen both
      economies and the peace accord between them. Mubarak called this "an historic
      agreement."

      Under the gas deal, the Egyptian government will not liable for any income or
      other taxes to Israel on the supply contract, but the Israeli partner of EMG -
      Merhav, which is controled by Israeli businessman Yosef Maiman - will be
      liable for capital gains taxes.

      Notably absent from yesterday's historic occasion was chairman of the IEC,
      Shlomo Rothman. Sources close to Ben-Eliezer said that only those directly
      connected to the negotiations had been invited. However, it is known that the
      two are barely on speaking terms, disagreeing principally on matters
      concerning the future restructuring and planned privatization of the
      electricity monopoly. Rothman supports such reforms, while Ben-Eliezer has
      publicly called for them to be put on hold for several years.
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