Egypt reached a settlement agreement with state-owned Israel Electric Corp. to pay a reduced fine for halting deliveries of natural gas, ending a dispute that started about seven years ago.
The accord signed June 16 cuts the fine to $500 million from $1.7 billion after reaching “an amicable agreement” out of a “keenness to avail an environment attractive to investment,” Egypt’s oil ministry said Sunday in an emailed statement.
Israel Electric, the state-owned utility, had sued Egyptian state entities after Egypt broke a contract signed in 2005 to supply the fuel. Israeli officials at the time said the termination could damage peace accords between the two nations.
Egypt ultimately canceled gas exports to Israel in 2012 after a section of a pipeline that connects the two countries was repeatedly attacked by militants and, with its own reserves dwindling, it diverted supplies for domestic use.
The fine will be amortized over 8 1/2 years and the National Bank of Egypt will issue a letter of credit.