Ampal-American Israel Corporation said that it has been advised by East Mediterranean Gas Co. (EMG), in which Ampal has a 12.5% interest, that Egyptian General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Holding Company (EGAS) notified EMG that they were terminating the Gas Supply and Purchase Agreement (Source GSPA) between the parties.
“EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal. EMG, Ampal, and EMG’s other international shareholders are considering their options and legal remedies as well as approaching the various Governments,” the company said in a statement.
EMG initiated arbitration against EGPC and EGAS in October 2011 due to EGPC and EGAS’s long-standing failure to supply the gas quantities owed under the Source GSPA.
EMG is seeking compensation from EGPC and EGAS for damages resulting from their contractual breaches.
EMG already has further requested that an arbitral tribunal issue an order that EGPC/EGAS perform their obligations under the Source GSPA and rule that EGPC and EGAS are not entitled to terminate the agreement.
The arbitration is ongoing. In addition, as previously disclosed, Ampal and certain other international shareholders of EMG have initiated the process of submitting claims against the Government of Egypt under various bilateral treaties for the protection of investments.
LNG World News Staff, April 23, 2012; Image: EGAS