Egypt is in talks with Spanish-Italian JV Union Fenosa Gas (UGS) in a bid to have the European outfit drop its arbitration claim over gas supply interruptions at the Damietta liquefaction plant, an industry source told Al Borsa. The World Bank’s International Centre for Settlement of Investment Disputes ordered in September that Egypt pay USD2bn to UGS in the case, which UGS filed after the state cut off flows to its Damietta liquefaction plant. According to the sources, the Petroleum Ministry is looking to tailor an agreement that would see Egypt gradually re-launch operations at the Damietta facility and compensate UGS for its losses through EGAS’ profits from the facility’s operations.