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Saturday April 23, 2011 7:01 PM (EST+7)
Egypt detains ex-energy minister for questioning

Read more: Egypt , energy, gas, Israel, Hosni Mubarak, Arab revolts

CAIRO, April 21 (Reuters) - Egypt's public prosecutor on Thursday ordered former energy minister Sameh Fahmy and five other senior energy officials detained for questioning into a natural gas deal with Israel the government is reviewing.

Israel gets 40 percent of its natural gas from Egypt under an arrangement put in place after a 1979 peace deal.

Opposition groups have long complained the gas was being sold at preferential prices and that East Mediterranean Gas (EMG), the company which supplies it, violated bureaucratic regulations.

A statement from the prosecutor's office said the deal involved selling gas to Israel at prices way below market rates, which incurred losses worth over $714 million to the state.

It said Fahmy and the five officials would be held for 15 days for questioning about the deal as the government widens its crackdown on corruption that riddled ousted President Hosni Mubarak's 30-year rule.

The prosecutor said the officials would be questioned on allegations that included profiteering, squandering national wealth and harming Egypt's national interests.

Egypt's new government has said it would review natural gas contracts with other states, including Israel and Jordan, which could boost the government's income by $3-4 billion.

The prosecutor also ordered the detention of one of Mubarak's close associates, Hussein Salem, a major shareholder in EMG and a former intelligence chief. It was not immediately clear if Salem had fled Egypt after the uprising.

Newly appointed Petroleum Minister Abdullah Ghorab said last month that Egypt was trying to amend gas export deals with a number of countries, particularly Israel. He said public disapproval of the gas exports was sufficient reason to negotiate better terms.

Previous governments had insisted the natural gas deals were fair.

Egypt is a modest gas exporter, using pipelines to export to Israel, Jordan and other regional countries. It also exports liquefied natural gas via facilities on its Mediterranean coast.

(Reporting by Dina Zayed; Editing by Miral Fahmy)






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