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Another Leak in Egyptian Gas Pipeline

Egypt has reported another leak in its natural gas pipeline, delaying resumption of deliveries to Israel and the rest of the region.
By Chana Ya'ar
First Publish: 3/14/2011, 10:43 PM / Last Update: 3/15/2011, 12:05 AM

Egypt has reported another leak in its natural gas pipeline, delaying resumption of supplies to Israel and the rest of the region.

The Egyptian state-owned East Mediterranean Gas company (EMG), told its Israeli partner, Ampal-American Israel Corp. on Sunday that it was set to renew deliveries.

However, “while resuming commercial gas supply by GASCO (the Egyptian gas transport company) to EMG and its Israeli customers, a leak was discovered when the gas pressure exceeded 60 bars,” Ampal said in a statement on Monday.

“The GASCO field team is currently working to repair the leak in its system. Consequently, commercial gas supply to Israel, Jordan, Lebanon and Syria as well as to major Egyptian cement industries and power gas consumers in the Sinai Peninsula awaits completion of repair,” the company said.

EMG shut down service five weeks ago after terrorists blew up the pipeline in the Sinai Peninsula, disrupting deliveries not only to Israel, but to Jordan as well.

Engineers said they are working to restore the service as soon as possible, Reuters news agency reported. Deliveries will initially be sent to the Israel Electric Corporation to operate its power plants. The Israel Corporation-owned Haifa oil refinery will be next on the list.

Although the EMG firm is state-owned, it is headed by Egyptian businessman Hussain Salem, whose Egypt Natural Gas Co, is a partner in the consortium together with Thailand's PTT, American businessman Sam Zell, Ampal-American and Israel's Merhav.

According to a statement by the National Infrastructure Ministry, the absence of Egyptian gas has cost Israel's economy some NIS 6 million ($1.7 million) per day. Due to fears the absence of Egyptian gas may become permanent, Israeli officials have begun to implement alternative plans. 

The Tamar gas field, originally set to be activated by the year 2014, may instead begin operations at least a year earlier at the beginning of 2013, if not before. In addition, the National Infrastructure Ministry ordered the Israel Electric Corporation last weekend to increase production at the coal-fired power stations, despite prior cautions against doing so. The ministry also instructed power plants to switch to diesel and fuel oil instead of gas in order not to drain the Yam Tatis gas reservoir by the end of 2012.

Yam Tatis is currently the sole provider of natural gas for the State of Israel due to the absence of gas supplies from Egypt. Tamar reservoir was to replace Yam Tatis in 2014.