Egypt and Eni-Total Consortium to Sign Deal on Processing Cypriot Natural Gas for Export

The Eastern Mediterranean region is set to become a significant energy hub, with Egypt and the Eni-Total consortium poised to sign a key agreement to transport and process natural gas from Cypriot waters for export. This deal, to be inked at Egypt's energy summit in February, will allow the consortium to sort out technical details and utilize Egypt's existing infrastructure to facilitate the process.



Egypt, which has been grappling with declining domestic gas production, stands to benefit significantly from this agreement. The country, which once positioned itself as an LNG supplier to Europe, has become a net gas importer due to falling output from its key Zohr field and legacy Nile Delta fields. By processing and exporting Cypriot natural gas, Egypt can supplement its domestic production, meet growing demand, and potentially restart LNG exports, generating much-needed revenue.

The Eni-Total consortium, which holds exploratory licenses for seven of 13 areas or blocks inside Cyprus' offshore economic zone, will make a final decision on how to extract and convey the gas before the summer. The Cronos gas deposit, estimated to hold more than the Aphrodite deposit, will be the primary source for this project. The so-called host-government agreement will be signed at Egypt's energy summit, with Egyptian President Abdel Fattah el-Sissi inviting his Cypriot counterpart to attend.

For Cyprus, this deal offers access to Egypt's existing infrastructure for liquefaction and processing, reducing development costs and time. Additionally, Cyprus can import gas for cheaper electricity generation until its land-based infrastructure is complete. While it's not certain, there's a possibility that some of the gas from the Aphrodite deposit could be used for domestic energy needs in Cyprus after processing in Egypt.

The agreement between Egypt and the Eni-Total consortium reflects a collaborative spirit between the two countries, with both working together to make the most of their respective resources and infrastructure. This deal can help strengthen bilateral relations and encourage further cooperation in the energy sector, ultimately establishing the Eastern Mediterranean as a significant energy hub.

In conclusion, the deal between Egypt and the Eni-Total consortium to transport and process Cypriot natural gas for export offers potential economic benefits for both countries. Egypt can increase its gas supply, generate revenue from LNG exports, and maintain its role as a regional gas hub. Cyprus, on the other hand, gains access to Egyptian infrastructure, cheaper electricity generation, and potential domestic gas supply. This agreement is a testament to the growing importance of the Eastern Mediterranean region in the global energy landscape and the potential for collaboration between countries in the region.