UPDATE 2-Egypt reviews re-start of gas exports to Israel

Thu Jun 2, 2011 5:00am EDT

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* Egypt gas exports to Israel halted since late April

* Minister wants to negotiate flexible contracts, pricing

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By Edmund Blair and Dina Zayed

CAIRO, June 2 (Reuters) - Egypt is reviewing the timetable for resuming gas exports to Israel and wants to negotiate more flexible contracts with foreign gas buyers, the Egyptian oil minister said on Thursday.

Asked when Egypt would resume the exports, Petroleum Minister Abdullah Ghorab said the issue was "under review".

He was speaking at a meeting of the Gas Exporting Countries Forum (GECF) in Cairo.

Israel received natural gas from Egypt under a 20-year deal signed in 2005, but flows were halted when an armed gang attacked a metering station in North Sinai on April 27.

Supplies have been halted for over a month, and U.S. investors in the company that operates the Israel export pipeline, Ampal American Israel Corp AMPL.TA AMPL.O, have taken legal steps against Egypt's government to ensure gas flows resume. [ID:nLDE74U22H]

Israel gets up to 45 percent of its natural gas from Egypt.

Egypt said in April it would review its gas contracts with other states, including Israel and Jordan, amid accusations that the government of deposed President Hosni Mubarak had improperly negotiated the sale of gas at preferential prices.

In an apparent reference to Egypt's efforts to renegotiate gas terms, Ghorab said on Thursday he favoured flexible contracts and pricing formulas to allow a "fair and sustainable relationship between sellers and buyers".

"This was exactly our understanding in Egypt of how this relation should be when we got into a renegotiation process for revising Egyptian export gas prices for our long-time contracts that have been accomplished a long time ago under completely different world market conditions," Ghorab said.

"Mutual understanding and a positive response from all parties (should) help in achieving stable long-term supplies that satisfy the interests of all parties", he added. (Writing by Tom Pfeiffer, editing by Jane Baird)

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