Cyprus and Egypt signed an agreement paving the way for the Mediterranean’s first subsea pipeline to carry Cypriot natural gas to the Arab country for re-export to Europe. “Today’s signing is an important milestone, not only for Cyprus but also the entire Eastern Mediterranean region,” Energy Minister George Lakkotrypis said after he signed alongside visiting Egyptian Oil Minister Tarek al-Molla.
He said the agreement, “the first of its kind in our shared region,” was crucial for channeling gas from the island’s “Aphrodite” offshore field to Egypt and to attract multibillion-dollar infrastructure investments.
A joint committee would be set up in 30 days to oversee the project.
Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain 130 billion cubic meters of gas but it has yet to be extracted.
The Aphrodite consortium, which also includes Israel’s Delek and Royal Dutch Shell, seeks to renegotiate terms before it taps the gas.
It is in talks with the Cypriot government over a bigger share of profits to make the project viable.
The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters could hold the same riches.
Wednesday’s agreement is backed by the European Union in its search to diversify energy sources.
“We are essentially talking about a European pipeline, intended to transport Cypriot natural gas to Egypt for re-export to Europe in the form of liquefied natural gas,” Lakkotrypis said.
The pace of construction of the pipeline to deliver gas to Egypt would depend on commercial agreements with investors.
Cyprus aims for natural gas to start flowing to Egypt’s LNG facilities in 2022, thus generating its first revenue from natural gas.
The island has also issued exploration licenses to ENI of Italy, U.S. firm ExxonMobil and France’s Total.
The Daily Star
20/09/2018
