NICOSIA, Cyprus — Next month, Egypt alongside a consortium that includes the French energy giant Total and Italy’s Eni is poised to finalize an important arrangement to facilitate the transportation of natural gas extracted from an underwater reserve located in Cypriot territory. The gas will subsequently be liquefied and processed in Egypt for market export, as officials disclosed on Friday.
Cypriot Energy Minister George Papanastasiou emphasized the significance of the forthcoming agreement, noting that it enables the consortium to address all technical aspects involved in transporting gas from the Cronos deposit to Egyptian facilities dedicated to liquefaction and subsequent distribution to markets, including Europe. He mentioned that the Eni-Total consortium, which possesses exploration licenses for seven out of the thirteen blocks within Cyprus’ offshore economic zone, is anticipated to reach a conclusive decision on the methods for extraction and transportation of the gas by the onset of summer this year.
Recent evaluations suggest that the Cronos deposit contains a larger volume of gas than that of the Aphrodite deposit, which was the first substantial discovery within Cypriot waters, estimated at approximately 4.2 trillion cubic feet. The so-called host-government agreement is scheduled to be inked at Egypt’s energy summit, taking place from February 17-19. Egyptian Oil Minister Kadim Badawi announced this intent following a meeting with Cypriot President Nikos Christodoulides.
Badawi noted that Egyptian President Abdel Fattah el-Sissi extended an invitation to his Cypriot counterpart to participate in the summit. The Egyptian minister commended the cooperative attitude exhibited by both nations in recent months, aimed at maximizing the capabilities of Egypt’s current infrastructure while acknowledging the substantial potential Cyprus possesses in terms of natural gas.
This agreement follows a series of recent advancements concerning Cyprus’ natural gas opportunities. Additionally, it was announced that ExxonMobil and its partners, Qatar Petroleum, have commenced drilling at the offshore Elektra well, situated close to the Glaucus deposit, which is estimated to contain between 5 and 8 trillion cubic feet of gas.
Pandastasiou remarked on the “promising” signs of natural gas at the Elektra well, located approximately 6 kilometers (3.72 miles) beneath the sea’s surface. Preliminary drilling results are expected by early April. The exploration rights for two Cypriot blocks are held by ExxonMobil and Qatar Petroleum.
In a strategic shift, Cyprus is transitioning its energy production from reliance on crude oil to a greater emphasis on cleaner and more affordable natural gas. Although there have been delays in establishing an onshore terminal for converting liquefied natural gas into gaseous form, Cyprus plans to utilize a tanker included in the terminal contract to manage gas processing.
Papanastasiou revealed that Egypt has shown interest in employing the Prometheus tanker for its needs until Cyprus completes the necessary land-based infrastructure to facilitate cheaper gas imports for electricity generation.
However, contractual agreements with energy firms regarding the allocation of Cypriot natural gas create uncertainty as to whether the island would utilize its own gas for domestic power needs. Cyprus may resort to purchasing natural gas from other markets, albeit at a lower overall cost.
The Cypriot energy minister also indicated that a distinct agreement will be signed between Cyprus and Egypt at the Egyptian energy summit, which anticipates the transportation of gas from the Aphrodite deposit to Egypt. The discussions with a Chevron-led consortium managing Aphrodite remain incomplete, with decisions pending regarding whether the gas will meet domestic energy demands or be processed in Egypt for export.
Ongoing negotiations between Cyprus and Chevron about Aphrodite continue.
