Ampal-American Israel Corp. said Sunday it was informed its contract with Egyptian General Petroleum Corp. and Egyptian Gas Holding Co. was terminated.
An Israeli official last weekend said the decision was "dangerous" though Egyptian Natural Gas Chairman Mohamed Shoeib said it was "right to end the contract" because of payment disputes, reports Bloomberg News.
Israeli Foreign Minister Avigdor Lieberman said Monday, however, that "this is a commercial dispute, and not a political one."
Egyptian Oil Minister Abdallah Ghorab told Bloomberg the decision to cancel the natural gas agreement was "a contractual matter."
Islamist parties are dominating the post-revolutionary political landscape in Egypt. Lieberman was quoted, however, as saying a peace agreement between both sides "is important to Israel, and no less so to Egypt."
A natural gas pipeline running from Egyptian's Sinai Peninsula to Israel and Jordan was bombed 14 times since last year's revolution, most recently April 8.