Egypt will pay $2 billion to Union Fenosa Gas Company as a settlement for halting gas supplies to the company’s Damietta LNG plant in 2012, The Financial Times reported.
Union Fenosa, a joint venture (JV) between Italian Eni and Spain’s Naturgy, took the case to the International Center for Settlement of Investment Disputes in 2014 arguing that the government had breached contract by stopping supplies.
The Egyptian government was forced to suspend gas exports in 2012 due to ongoing political turmoil in the country.
Naturgy said in a statement on September 3 that the court ruled that Egypt had failed to give “fair and equitable treatment” to Union Fenosa, and was in breach of a bilateral investment treaty with Spain.
Sources familiar with the case declared that the $2 billion is set to be paid in the form of new gas supplies to the plant.
The Damietta plant is operated by SEGAS, which is a JV between Union Fenosa, and state-owned companies, the Egyptian Gas Holding Company (EGAS) and the Egyptian General Petroleum Corporation (EGPC). Union Fenosa owns 80% of the facility while EGAS and EGPC hold the remaining 20%.
Naturgy expects the $2 billion award to lead to an agreement with Egypt in order for the country to resupply the plant with gas after a four-years-halt.