The Egyptian termination of a contract supplying natural gas to Israel on Monday stemmed from a business dispute between an Israeli company and the Egyptian Natural Gas Holding Company, Prime Minister Benjamin Netanyahu said Monday afternoon, echoing comments made earlier by both Israeli and Egyptian officials.
"We don't see this cutoff as something that is born out of political developments. It's actually a business dispute between the Israeli company and the Egyptian company. There are no political issues here. But there is a lot of gas," Netanyahu said after the head of the Egyptian company on Sunday announced the termination of its contract to ship gas to Israel because of contractual violations.
"As time passes, our gas reserves in the Mediterranean are increasing," the prime minister noted. "We have, as I said, the gas reserves to make Israel totally energy independent, not only from Egypt but from any other source, and to have Israel become one of the world's large exporters of natural gas. So we're quite confident."
Finance Minister Yuval Steinitz also remarked on Israel's gas supplies, saying, "We must now double and triple our efforts to expedite the supply of domestic natural gas to begin in 2012, rather than April 2013, and overcome all the bureaucratic obstacles. We must protect our energy independence and lower the price of electricity for businesses and private citizens alike."
Steinitz expressed some concern, however, over Egypt's cancellation of the contract, saying, "This is a dangerous precedent that overshadows the peace agreements and the peaceful atmosphere between Israel and Egypt." Steinitz said he had not been in contact with his Egyptian counterpart on the subject.
Following Steinitz's remarks, Egypt's military ruler Mohamed Hussein Tantawi said on Monday that his country's armed forces would defend the borders with Israel if necessary, state media reported.
"Our borders, especially the north-east ones, are inflamed. We do not attack neighbouring countries but will defend our territory. We will break the legs of anyone trying to attack us or come near the borders,” the MENA news agency quoted Tantawi as saying, during an address to troops on annual field exercises in the Sinai Peninsula. “Therefore our forces must be on alert and constant combat readiness," Tantawi added.
Ties between Egypt and Israel have been strained since a popular uprising last year toppled President Hosni Mubarak, who had put a peace treaty with Israel at the center of his regional policy. Israel has also said it was concerned by a security vacuum in Egypt's Sinai region on its border.
Egypt, the Arab world's most populous nation, was the first to sign a peace treaty with Israel in 1979, a move that prompted the assassination of president Anwar Sadat in 1981 by Islamists.
Foreign Minister Avigdor Lieberman also commented on Egypt's cancellation of the gas deal, saying, "We want to understand this as a trade dispute. I think that to turn a business dispute into a diplomatic dispute would be a mistake."
"Israel is interested in maintaining the peace treaty and we think this is also a supreme interest of Egypt," he said.
Lieberman was quoted as saying on Sunday that the situation in Egypt was more worrying than what was happening in Iran, and called for a significant boost to troop numbers along the southern borders.
In response, Egypt said Monday it had made a formal request for Israel to examine the statement attributed to Lieberman, French news agency AFP reported.
Egyptian Foreign Minister Mohammed Kamel Amr asked Cairo's ambassador in Tel Aviv to request "clarifications on the accuracy of the statement attributed to the Israeli foreign minister," according to AFP.
Meanwhile, Deputy Foreign Minister Danny Ayalon met on Monday with Egyptian Ambassador to Israel Yasser Reda, and asked him for clarification regarding the halted gas supply. The ambassador stressed that the issue centered on a commercial dispute and was not political.
Egyptian media also reported on Monday that Egyptian Energy Ministry officials accused the Israeli company of trying to create a political crisis in the wake of the business dispute. "This was an independent decision of the oil and gas authorities, and only the Egyptian Supreme Court can cancel any addenda relating to the supply of gas in the peace treaty," one official said.
Despite the cancellation of the contract, MENA quoted the country's Planning and International Cooperation Minister, Faiza Abu Al-Naja, as saying, "We have no objection to drafting a new gas sales agreement with Israel, but this agreement will be based on a new price and new terms."
Naja said that Egyptian gas company had apparently informed Israel it planned to sign a new deal with it for the supply of gas, Israel Radio reported on Tuesday.
However, the cessation of the gas supply from Egypt could already cause significant damage to Israeli pockets: Today, Israeli citizens are already paying high electricity rates and just last month the rate peaked at about NIS 0.59 kilowatts per minute, an increase of 9.5 percent.
Some in Egypt, meanwhile, were pleased with the cancellation of the agreement, saying it reflected the will of the Egyptian people. "Despite the peace agreement with Israel, the Egyptian people refuse any normalization," said Abdel Moneim Aboul Fotouh, an independent candidate in Egypt's upcoming presidential race.
Another Egyptian presidential candidate, frontrunner Amr Moussa, said the cancellation of the agreement was a natural step for Egypt in light of reports that the deal was "riddled with corruption," Israel Radio reported.
Egyptian Prime Minister Kamal Ganzouri was expected to discuss the issue with Egypt's oil, finance and international cooperation ministers. Al Ahram online also reported that two representatives from Israel had arrived in Cairo to discuss the gas dispute with relevant officials.