Cyprus and Israel to Finalize Gas Field Deal Next Month
Cyprus and Israel are nearing a significant agreement regarding the Aphrodite natural gas reservoir. Energy Minister Michalis Damianou announced that an Israeli delegation will visit Cyprus within two weeks. The two nations are in discussions to finalize remaining issues, with the goal of signing a deal by the end of March.
Progress on Aphrodite Gas Field Agreement
The ongoing talks focus on managing the part of the Aphrodite gas field that lies within Israel’s Ishai block. This involves determining the natural gas quantities potentially found in Israeli economic waters, along with establishing compensation mechanisms for Israeli stakeholders.
- Aphrodite reservoir estimated to contain 3.5 trillion cubic feet of recoverable gas.
- The agreement could pave the way for effective gas management.
Timeline for Commercialization
Once the agreement is in place, Chevron, the operator of the Aphrodite field, aims to begin gas production by 2030. The gas was first discovered in late 2011. Additionally, the Kronos reservoir in Block 6 is expected to be the first to monetize, targeting late 2027 for the start of operations.
The natural gas from the Aphrodite reservoir will be transferred to Egypt through existing pipelines in the nearby Zohr field. Once it reaches Egypt, the gas will be liquefied and re-exported to European markets.
Updates on Energy Projects
In a recent update, Minister Damianou discussed the Great Sea Interconnector project. This undersea cable will connect the electricity grids of Cyprus and Greece. Currently, a new cost-benefit analysis is planned, with a company to be selected collaboratively by both governments.
- Cyprus has yet to contribute €25 million for the 2025 fiscal year towards the project.
- Funding is for Greece’s independent power transmission operator.
LNG Terminal Developments
The LNG terminal at Vasiliko is progressing slowly, with discussions ongoing with the United Arab Emirates about potential collaboration. A new tender is anticipated to be issued by June, following a halt when the Chinese-led contractor withdrew in mid-2024.
The current project costs approximately €315 million. The previous contract was awarded to CMC (CPP-Metron Consortium Ltd) in December 2019 but was terminated by CMC in July 2024 due to disagreements.
For now, the government is reviewing a ‘gap analysis’ provided by Technip, the new project manager. Etyfa, the state-owned natural gas company, is evaluating whether to redesign the LNG terminal or complete existing structures.
