Natural gas pipeline running from Egypt into Israel explodes. Photo: www.worldbulletin.net.

The East Mediterranean Gas Company, which owns and operates the underwater pipeline that supplies natural gas to Israel from Egypt, is refuting claims by the Egyptian government that they are behind on their payments. Earlier this week, Egypt cancelled its supply of natural gas to Israel, citing EMG’s lack of payment as the reason for the shut down.

Shareholders of EMG, which Egyptian officials claim is behind on payments to state owned gas companies in Egypt, forcing the cut off of natural gas supplies to Israel, say they are not behind and the reason for the shutdown is more than just “commercial”.

“Egypt’s public explanation that EMG was behind on payments is incorrect,” the shareholders told Reuters Africa.

“Any attempts to characterize this dispute as a mere commercial one is misleading,” they said.

Israeli Prime Minister Benjamin Netanyahu said Monday that the supply cut off was not something his government saw as “born out of political developments”.  Meanwhile, Germany’s foreign minister called on Egypt to reaffirm its peace treaty with Israel on Tuesday.

Egypt had said on Tuesday that EMG could renegotiate a contract based upon new pricing, however EMG claims they have been attempting to renegotiate with Egypt for Months.

“EMG’s international shareholders are actively considering legal avenues and will likely seek substantial damages under multiple applicable bilateral investment treaties,” the shareholders said on Tuesday, claiming that state owned Egyptian gas companies are indebted to EMG for failures to provide natural gas that was covered under existing contracts.