Egypt and Cyprus on Monday signed deals for the reexport and commercialization of Cypriot gas, agreements that are key for Cairo in its push to become a regional energy exporter as its own output suffered declines in the past couple of years.
Under the deals, production from the Cronos gas field, off Cyprus’s southwest coast, and Aphrodite, located to the southeast, will be transported to Egyptian liquefaction facilities at Idku and Damietta before being exported as liquefied natural gas. The signing of the memorandum of understanding was overseen by Egyptian President Abdel-Fattah El-Sisi and Cypriot President Nikos Christodoulides at a gas conference in Cairo.
The essence of these agreements is not limited to promoting the exploitation of deposits, but also “broadens the prospects for energy cooperation with Egypt,” the Cypriot presidency said in emailed statement.
Aphrodite, first discovered in 2011, is estimated to hold 4.4 trillion cubic feet (125 billion cubic meters) of natural gas, but is yet to be developed. Chevron Cyprus Ltd. holds a 35% operator interest in Aphrodite with partners BG Cyprus Limited (Shell) 35% and NewMed Energy 30%.
Chevron welcomed the agreements, with Frank Cassulo, Chevron International Exploration & Production’s vice president, saying in a statement that it will “provide the basis to move forward with related commercial arrangements.”
The agreements are pivotal for Egypt, which has been pursuing agreements with neighboring countries amid a sharp decline in its own output over the past couple of years. A crippling foreign currency crunch stymied government efforts to repay arrears to foreign oil companies, impacting investment in oil fields.
The decline in output turned the North African nation into a net importer as rising electricity demand strained local resources. Egypt’s gas production fell in June 2024 to its lowest level since 2017. As a result, liquefied natural gas imports by the government rose to their highest in about six years.
Officials are hoping to resume exports by the end of 2027, after a massive $57 billion bailout by the United Arab Emirates, the International Monetary Fund and others helped ease the currency crunch.