CAIRO — The head of the Egyptian Natural Gas Holding Company said Sunday it has terminated its contract to ship gas to Israel because of violations of contractual obligations, a decision Israel said overshadows the peace agreement between the two countries.
The 2005 natural gas deal has become a symbol of tensions between Israel and Egypt since the uprising. For many Egyptians, it typifies the close relations the regime of deposed President Hosni Mubarak forged with Israel and how his associates benefited greatly from such business deals.
Critics charge that Israel got the gas at below-market prices and that Mubarak cronies skimmed millions of dollars off the proceeds, costing Egypt millions of dollars in lost revenue.
Egyptian militants have blown up the gas pipeline to Israel 14 times since the uprising more than a year ago.
Israel insists it is paying a fair price for the gas.
Mohamed Shoeb, the head of the Egyptian Natural Gas Holding Company, said the decision to cancel the deal was not political.
“This has nothing to do with anything outside of the commercial relations,” Shoeb told The Associated Press.
He said Israel has not paid for its gas in four months. Israeli Foreign Ministry spokesman Yigal Palmor denied that.
Shoeb told Egyptian TV that the decision to cancel the contract was made Thursday because “each side has rights and we are representing our rights.”
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