Egypt tells Jordan no gas without price hike

May 18, 2011

, AMMAN, May 18 – Egypt is withholding its contracted gas supply to energy-poor Jordan unless a new deal is signed at a higher price, a Jordanian official said on Wednesday.

"Egypt wants to raise the gas price and that requires signing a new contract with Jordan, which had been receiving supplies at a preferential price," said the Jordanian official, speaking on condition of anonymity.

Under a 14-year deal signed in 2002, Egypt used to sell gas to Jordan at a discounted price — half of the market price, or $3 (2.16 euros) per million British Thermal Units (1,000 cubic feet of gas equals 1.027 million BTU).

"Now Egypt has decided not to wait until 2016 and wants to raise the price immediately," the official added.

Egypt\’s Prime Minister Essam Sharraf has asked for the revision of all contracts to supply gas abroad, including to Israel, the official news agency MENA reported on Wednesday.

In late April, unknown attackers used explosives against the pipeline in the town of Lihfen in northern Sinai, near the Gaza Strip, halting supplies to Jordan and Israel.

"The pipeline has been repaired but Egypt refuses to provide Jordan with gas unless a new agreement is reached," the official said.

The pipeline was previously sabotaged on February 5, six days before a popular uprising forced veteran Egyptian president Hosni Mubarak to resign.

"Jordan has called on Egypt to respect the signed contract … only additional supplies should be included in the new contract," the official said.

The gas cut is costing Jordan $3.5 million (2.4 million euros) a day, officials have said.

Jordan, which buys 95 percent of its energy needs, imports about 240 million cubic feet (6.8 million cubic metres) of Egyptian gas a day, or 80 percent of its electricity requirements.

It has said it would ask "brotherly and friendly" countries to provide the kingdom with heavy fuel and diesel to compensate for the halted gas.

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