Israel's Infrastructures Minister Uzi Landau said on Sunday that an explosion at an Egyptian gas terminal a day earlier proved that the nation must “do everything to improve Israel's energy security."

Conflicting reports said that terrorists or a gas leak detonated segments of the El Arish-Ashkelon pipeline that provides Israel with just over 40 percent of its natural gas supply, but Egypt stuck by its version that there terror was not involved, a version accepted by foreign news agencies.

Prime Minister Binyamin Netanyahu and other Israeli officials said on Sunday that the cutoff of gas would only have a limited effect on power generation, since Israel has coal, oil and diesel reserves on hand to operate its power stations.

“There is no concern of a disruption in electricity in Israel, even if gas deliveries from Egypt are halted completely," said Moshe Bahar, Vice President of the Israel Electric Corporation.

“It takes us about an hour to switch production from natural gas to alternatives,” Bachar told Israeli Army Radio. However, the blasts, which Egyptian television insisted were caused by pipeline leaks, could have a dramatic effect on local energy prices.

"Rising costs for fuels and coal, partly because of the events in Egypt, will likely cause a 10-20 percent increase in [electricity] prices in the medium term, until the start of gas deliveries from Tamar in 2013," Bachar said.

Bachar was referring to the Tamar natural gas field off Israel's Mediterranean coast, which experts say holds upwards of eight trillion cubic meters of gas.

Landau said he supported exempting the field's developers from a contentious proposed windfall profits tax.

Israel was to have received 1.7 billion cubic meters of natural gas annually for more than decade and half, according to a deal with Egypt. However, the insurrection in Egypt may endanger that three-year-old agreement.

A day prior to the blasts, Netanyahu and Quartet special envoy Tony Blair said that projects to develop gas fields off the Gaza coast may resume.

Just-installed Egyptian Prime Minister Ahmad Shafiq said the gas supply – which also provides Jordan with about 80 percent of its power needs – would be resumed within about two weeks.

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