US, Israeli and British interests in the Aphrodite field are close to striking a deal with Egypt to pump Cyprus natural gas to the Idku LNG plant.
“Commercial negotiations are underway between the companies owning the Aphrodite gas (Noble Energy, Delek, Shell) and the LNG plant in Egypt,” Cypriot Foreign Minister Nicos Christodoulides told Egyptian newspaper Al Akhbar.
“What I can say is that these negotiations are advanced and very close to conclusion, paving the way for the commencement of the implementation of the gas pipeline,” he added.
Last month, Nicosia and Cairo signed an inter-state agreement opening the way for the Mediterranean’s first subsea pipeline to carry Cyprus natural gas to Egypt for re-export to Europe.
The agreement was crucial in efforts of both countries to channel gas from the island’s ‘Aphrodite’ reservoir to Egypt and attract multi-billion infrastructure investments.
Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet of gas but it has yet to be extracted.
But the Aphrodite consortium – including Israel's Delek and Royal Dutch Shell – seeks to renegotiate its contract on the gas field before it plans to tap the gas.
It is currently in talks with the Cypriot government over a bigger share of the profits to make the project viable.
The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters hold the same riches.
Construction of the pipeline depends on how fast commercial agreements advance with the investors.
Cyprus aims for natural gas to start flowing to Egypt’s LNG facility in 2022, therefore generating its first revenue from natural gas in the same year.
Christodoulides said the gas pipeline agreement constitutes a milestone, not only for the relations between the two countries but also for the whole region.
“In essence, the agreement puts in place the necessary legal framework, facilitating the conclusion of the commercial negotiations between the companies owning the Aphrodite gas and the Idku LNG plant.”
He said the pipeline will benefit both the Cypriot and the Egyptian economy enormously, not only by securing revenues from the hydrocarbon exploitation but also by creating jobs, attracting foreign direct investment, building the necessary infrastructure and contributing to the energy security of the wider region.
