Agreements signed for two deepwater gas projects offshore Cyprus, both exporting to Egypt

NewMed Energy, one of the co-venturers, said the estimated cost of the project under the updated plan is $4 billion, although this may change following findings of pre-FEED and FEED studies.

A positive decision will hinge on establishing commercial arrangements for development and construction of the export pipeline for export; signing of agreements for the supply of natural gas; fulfilling the associated closing condition on receipt of regulatory approvals; and finalizing financing arrangements.

All being well, first gas should flow in 2031.

The notice of breach followed the government’s identification of non-compliance with the agreed milestone for performance of FEED, as set out in the terms of the production sharing contract. This led to signing of a standstill agreement last September. 

The updated development plan involves installing a floating independent production facility above the reservoir, capable of handling of around 800 MMcf/d, supplied via four producing wells during the initial phase.

The Chevron-led partnership also announced that it had signed a non-binding memorandum of understanding (MoU) with the Cypriot government, the Cyprus Hydrocarbons Co. (CHC), the Egyptian government and Egyptian national gas company EGAS.

The MoU outlines the framework for negotiations on exporting gas from Aphrodite to Egypt, including construction of transmission infrastructure and sale arrangements. Detailed agreements should be signed in due course, NewMed said.

EGAS would be the sole buyer of gas produced from the reservoir, with the partners given an option to purchase certain quantities sold to EGAS as liquefied natural gas (LNG).

Offshore Cronos development project

On another project, Eni and TotalEnergies have also signed an agreement with the Egyptian and Cypriot governments concerning development of the Cronos gas discovery in Block 6 offshore southern Cyprus.

The aim is to establish a new gas hub in the Eastern Mediterranean connecting to Egypt’s existing hydrocarbon infrastructure.

The agreement outlines the framework needed for a fast-track development of Cronos, under which the gas would be transported to and processed at facilities serving the Eni-operated Zohr field offshore Egypt. It would the undergo liquefaction at the Damietta LNG plant for export to European markets.

Cronos, discovered in 2022 and appraised last year, contains estimated in-place gas of more than 3 tcf. Block 6 has further potential resources undergoing exploration and appraisal, including the 2022 Zeus discovery.

Eni operates with a 50% interest. The company also operates offshore Block 8, with interests in Blocks 7 and 11.