Israel to import natural gas from Egypt

Israel will sign a long-awaited $2.5 billion deal to import natural gas from Egypt over 15 years. Under the deal, which followed improved political relations, Egypt will sell Israel 1.7 billion cubic meters of gas per year from October 2006, a total of 25 billion cubic meters. There will be an option to extend the deal a further five years.

Israel's Infrastructure Minister Benjamin Ben-Eliezer will fly to Cairo to meet with President Hosni Mubarak and sign the deal that had been in the works for four years, Ben-Eliezer's spokeswoman said. State-owned utility Israel Electric Corp. approved an accord a year ago with Eastern Mediterranean Gas, a private Israeli-Egyptian firm, to buy natural gas from Egypt.

But the essential political agreement was held up by frosty relations during a Palestinian uprising. Relations have improved since Palestinian leader Yasser Arafat's death last year gave new impetus to peace efforts. Egypt brokered an Israeli-Palestinian cease-fire in February.

EMG will over the next year and a half build a gas pipeline from Egypt to the coastal Israeli city of Ashkelon.