Union Fenosa Gas of Spain could drop its lawsuit against Egypt if the country allows the company to import gas from Israel to its LNG export plant in Egypt.
UFG, a JV owned by Gas Natural of Spain and Italy’s Eni, suspended exports from its plant in Egypt in 2012 when gas shortages forced the government to divert supplies to its growing domestic demand. This resulted in UGF launching a multi-billion dollar lawsuit against Egypt.
Sources close to the matter told Reuters that arbitration has not been suspended, but UGF would consider it if Egypt approves the import deal from the Israeli Tamar gas field.
UFG’s willingness to drop the lawsuit may help unlock the Israeli import deal after Egyptian authorities in May said that approvals could not otherwise be granted.
The deal would see UFG import 2.5 trillion cubic feet gas over 15 years.
LNG World News Staff, September 17, 2014; Image: Delek Group