On July 1, 2005, Israel and Egypt signed a $2.5 billion gas deal in Cairo, after years of postponement due to tense relations. Egyptian Oil Minister Sameh Fahmy and Israel's Minister of National Infrastructure Benjamin Ben-Eliezer signed the agreement to supply Israel with 1.7 billion cubic meters of natural gas a year to the Israel Electric Corporation (IEC) beginning in October 2006.
Over the next 15 years, Israel will recieve a total of 25 billion cubic meters of natural gas from Egypt, and the deal could be extended for a further five years. The IEC and Eastern Mediterranean Gas (EMG), an Israeli-Egyptian consortium, approved the agreement more than a year ago. They expected to sign a more detailed contract by the end of July 2005.
The deal will jumpstart Israel's “natural gas revolution,” hastening a switch in Israel's energy use from oil and coal to natural gas, a far cleaner and cheaper fuel source than coal, which provides 70 percent of the country's electricity.
EMG has already started construction on a gas pipeline from Egypt to Ashkelon that should be completed by 2007. IEC spokesman Dedi Golan is confident that natural gas will soon supply Israel with 60 percent of its electricity.