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Egypt instability threatens the energy sector

LNG Industry,

Concerns for the energy sector in Egypt have been raised following a terrorist attack against a gas pipeline in the Sinai peninsula. The country is facing a period of political uncertainty and long-standing grievances are being aired by a growing number of groups, some of which are armed. Even with the army bolstering its presence around key assets, it will be very difficult to ensure full protection of the energy infrastructure based in the country.

Pipeline attack

The authorities claim that armed men entered a monitoring station along the length of the El-Arish to Aqabah pipeline, held up the guards then detonated four remotely controlled explosive devices next to the asset. The flames from the explosion could be seen from the Gaza Strip and gas exports to Jordan and Israel were disrupted for several days.

While initially the Israeli authorities blamed the blast on an industrial accident it is now widely believed to have been caused by saboteurs. The damage took several days to repair, but the impact on energy sector confidence in the security environment in Egypt is likely to take longer to recover.

Political uncertainty

Current instability in the country and a removal of long-standing president Hosni Mubarak could allow for a surge in the growth of political organisations in Egypt. While many will likely advocate increased democratic reform and liberalism there are notable strains and cleavages of Egyptian politics which will advocate a more violent approach to ensuring political change. They are certainly in the minority in a population of over 80 million, but they are likely intent nonetheless on making a political impact as Egypt undergoes a period of unprecedented change over the coming months.

Islamist terrorism

One of the first questions to arise was that of responsibility for the attack. Radical Islamists have certainly been responsible for a series of bombings in Egypt over the past 20 years. As well as domestic groups, militants from the neighbouring Gaza Strip may have infiltrated the territory. They certainly have high intent to attack assets associated not just with Egypt, but those that supply gas to Israel.

Bedouin activism

However, the latest incident may also have been conducted by disgruntled Bedouin residents of the area. Many claim to have been marginalised by the government for years and could be seeking to express their anger against the state. According to AKE’s Egypt specialist Alan Fraser, Bedouin activists attempted to blow up the same pipeline last year. Mr Fraser also believes that Bedouin residents in the Sinai peninsula have access to the sort of weaponry allegedly used in the pipeline attack.

"Smuggling routes are in place between Egyptian territory and the Gaza Strip. Even with increased security measures and clampdowns, it is likely that smugglers will still be able to dig new tunnels and bring more equipment across the border in both directions.”

Protecting assets

In anticipation of possible violence the Egyptian army increased its presence around critical assets, including the pipeline, only days before the attack took place. Some have questioned how such an attack could have taken place despite this increase. However, the security force presence is still fairly limited, not least because of a controversial agreement between Egypt and Israel to limit troop numbers deployed to the Sinai peninsula. AKE security specialists also assess that a pipeline, stretching over a long distance in isolated territory, is an extremely difficult asset to protect. Even if you do bolster the number of troops you have it is very difficult to patrol an entire length of a pipeline at all times.

Risk mitigation

Energy firms are advised to review their security measures in the country in light of recent events. However, the implementation of physical security measures such as increased patrols and asset surveys should not be regarded as the only measures that firms should take. In-country employees and residents of local communities in areas of company operations should also be consulted. Terrorist attacks, particularly opportunist ones, are likely to be conducted by local residents. As such if they are not aggrieved by a company's activities or its employment policies they will have less intent to express their frustration through violent means.

John Drake is a Senior Risk Consultant and Middle East specialist from the intelligence department of AKE. You can follow him on twitter at

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