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The Arish–Ashkelon pipeline is a 100 km submarine gas pipeline connecting the Arab Gas Pipeline with Israel. Although it is not officially a part of the Arab Gas Pipeline project, it branches off from the same pipeline in Egypt. The pipeline is built and operated by the East Mediterranean Gas Company (EMG), a joint company of Mediterranean Gas Pipeline Ltd (28%), the Israeli company Merhav (25%), PTT (25%), EMI-EGI LP (12%), and Egyptian General Petroleum Corporation (10%).

History
The pipeline became operational in February 2008, at a cost of $180–$550 million (the exact figure is disputed). Initially Egypt and Israel had agreed to supply through this pipeline 1.7 e9m3 of natural gas per year for use by the Israel Electric Corporation. This has since been raised to 2.1 e9m3 per year to be delivered through the year 2028. In addition, by late 2009, EMG had signed contracts to supply through the pipeline additional 2 e9m3 per year to private electricity generators and various industrial concerns in Israel and negotiations with other potential buyers were ongoing. In 2010, the pipeline is supplying approximately half of the natural gas consumed in Israel, with the other half being supplied from domestic resources. The total physical capacity of the pipeline is 9 e9m3 per year and agreements between the two nations provide a framework for the purchase of up to 7.5 e9m3 per year of Egyptian gas by Israeli entities, making Israel one of Egypt's most important natural gas export markets.

In 2010 some Egyptian activists appealed for a legal provision against governmental authorities to stop gas flow to Israel according to the obscure contract and very low price compared to the global rates, however the provision was denied by Mubarak regime for unknown reasons. In 2011, after the Egyptian revolution against Mubarak regime, many Egyptians called for stopping the gas project with Israel due to low prices. After a fifth bombing of the pipeline, flow had to be stopped for repair.

2012 cancellation
Following the removal of Hosni Mubarak as head of state, and a perceived souring of ties between the two states, the standing agreement fell into disarray. According to Mohamed Shoeb, the head of the state-owned EGAS, the "decision we took was economic and not politically motivated. We canceled the gas agreement with Israel because they have failed to meet payment deadlines in recent months". Israeli Prime Minister Benjamin Netanyahu also said that according to him the cancellation was not "something that is born out of political developments". However, Shaul Mofaz said that the cancellation was "a new low in the relations between the countries and a clear violation of the peace treaty".