Egypt’s Supreme Administrative Court has authorised the sale of Egyptian gas to Israel, overruling a previous verdict by a lower court.
But the new verdict on Saturday stipulated that Egypt should monitor the price and quantity of its exports and ensure it met local energy needs before exporting.
The ruling ends a legal battle that caused a public controversy which focused on the price of gas sold to Israel, and reflected Israel’s unpopularity among Egyptians despite a 1979 peace accord.
Gas started flowing to Israel through a pipeline for the first time in May 2008 under an agreement signed in 2005 for the supply of 1.7 billion cubic meters a year over 20 years.
Mohamed al-Husseini, the most senior judge of the panel which issued the verdict said: "It is not within the jurisdiction of the courts to hear appeals against the government's decision to export gas to eastern Mediterranean markets, including Israel. It was a sovereign decision."
In November 2008, a Cairo court overruled the government's decision to allow the exports after a group of lawyers filed a suit against the state, saying the Israelis were buying the gas at prices below international prices.
The Egyptian government is reluctant to reveal the price it receives for natural gas exports.
A court ruled in February 2009 that gas exports could continue pending a review of the November ruling, although the government had ignored the verdict anyway.
Against the principle
Some Egyptian leftists and Arab nationalists oppose the sale of gas to Israel in principle , having fought four wars against the Jewish state between 1948 and 1973 before making peace in 1979.
Egypt exports gas to Israel and Arab states by pipeline and also ships liquefied natural gas (LNG) abroad.
In 2008 it said it would not sign any new gas export contracts until 2010 in order to meet rising local demand.
Egypt's privately owned East Mediterranean Gas (EMG) began exporting fuel to the state-owned Israel Electric Corp in May 2005, after agreeing to supply 1.7 billion cubic metres (5.6 billion cubic feet) a year for 20 years.
Earlier this month, Ampal-American Israel Corp, which has a 12.5 per cent interest in EMG, said a September 2009 deal to increase the supply to 42 billion cubic metres had come into force.
It said the contract was worth roughly six billion dollars (4.4 billion euros).