Israeli reaction to Egyptian gas mixed

July 5, 2011 at 8:02 AM

JERUSALEM, July 5 (UPI) -- Analysts expressed mixed views about the Israeli natural gas sector after militants attacked a pipeline from Egypt for the third time in five months.

Attackers on Monday blew up the natural gas pipeline that carries Egyptian gas to Israel and Jordan for the third time this year. The attack halted the flow of natural gas upstream and for consumers in the city of Arish in North Sinai province, Egyptian daily newspaper al-Ahram reports.

The attack came as the Israeli Public Utility Authority announced that electricity prices could go up 20 percent by 2012. Eytan Sheshinski, an economics professor at Hebrew University, told The Jerusalem Post there was "no objective" reason for an increase in price.

But Amit Mor, an energy specialist at consulting company Eco Energy, told the Post that natural gas prices could increase because of rising demand.

"A disruption in supply of Egyptian gas to Israel has a significant impact on the electricity tariffs in Israel," he added.

Major natural gas discoveries at the Tamar and Leviathan offshore fields have redefined the Israeli energy sector. Israel gets some of its electricity from gas supplied through Egyptian pipelines, though officials in April said the country must find ways to become self-sufficient in energy.

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