How Egypt's reliance on Israeli gas could blow up in its face

Since the mid-1990s, negotiations over natural gas between Egypt and Israel have oscillated between strict secrecy and political exploitation. 

In 1994, the first discreet talks began over the possibility of exporting Egyptian gas to Israel via undersea pipelines, at a time when the Egypt-Israel peace treaty was still hugely unpopular, and any such step was seen as a political gamble. 

Yet economic interests and deep security ties between the two countries’ intelligence services pushed the matter forward, culminating in a 2005 agreement to supply Israel with Egyptian gas at preferential rates. That deal later sparked a major scandal when it was revealed that the prices were far below global market levels.

The arrangement, implemented through the East Mediterranean Gas Company in direct coordination with Egypt’s General Intelligence Service (GIS), eventually led to one of the largest international arbitration cases brought against Egypt. Following the 2011 revolution, with repeated attacks on the Sinai pipeline, gas deliveries ceased.

Read more: How Egypt's reliance on Israeli gas could blow up in its face