Egypt to pay $2bn in gas deal dispute

The International Centre for Settlement of Investment Disputes, the World Bank’s arbitration body, has fined Egypt $2 billion for failing to fulfil an agreement of supplying natural gas to an Italian-Spanish company during the Arab Spring, BBC reported today.

In 2014, Unión Fenosa Gas (UFG), a joint venture between Spain’s Naturgy and Italy’s Eni, filed a lawsuit against Egypt after it had stopped supplying gas to the union’s Liquefied Natural Gas (LNG) plant in the country’s province of Damietta.

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The North African country was reported to have halted feeding UFG with natural gas during the time it had faced energy shortages, months after the 25 January revolution.

Economists say that Egypt is likely to repay the fine in the form of renewed gas supplies to Damietta rather than in cash.

Egypt has been a significant importer of LNG in recent years. It is expected to resume gas exports following the discovery of several significant natural gas fields, including Eni’s large Zohr field in the Egyptian sector of the Mediterranean.