The intergovernmental agreement between Cyprus and Israel on the management of the Aphrodite–Ishai gas reservoir is now in its final drafting phase, Energy Minister George Papanastasiou has said.
Speaking during a symposium in Nicosia, the Minister said that the text of the agreement is “essentially finalised,” noting that the latest draft — including Cyprus’ comments — was sent to Israel last week. The goal of both countries’ Energy Ministers, he said, is for the agreement to be signed “by the end of the year.”
The arrangement under negotiation will set out how the small section of the Aphrodite reservoir that extends into the Ishai area will be managed, covering quantities of natural gas potentially located within Israel’s Exclusive Economic Zone. Papanastasiou said the agreement will establish the compensation mechanism for the Israeli side for the share that corresponds to them.
Significant progress on Cyprus’ offshore gas developments
Turning to broader developments in Cyprus’ Exclusive Economic Zone, Papanastasiou referred to “very important progress” over the past year, which he said contributes to stability in the Eastern Mediterranean and creates prospects for exporting natural gas to European markets. He added that some quantities could potentially be used for domestic consumption in the future.
Outlining Cyprus’ energy development plan, the Minister stressed that exploiting the island’s discoveries requires appropriate infrastructure, given that fields lie in different parts of the EEZ. He highlighted the Cronos field in Block 6 as the first expected to be developed, as it lies close to Egypt’s existing Zohr infrastructure. The field, he said, can be connected with an underwater pipeline to Egypt, where the gas would be processed onshore before being sent to Damietta for liquefaction and export as LNG.
On the Aphrodite field, Papanastasiou said development is at an advanced stage and that the operator is moving ahead in coordination with the other licensees. Unlike Cronos, Aphrodite will include a floating processing unit located directly above the reservoir, with the gas transported to a landfall point near Port Said and then fed as dry gas into Egypt’s pipeline network.
The Minister recalled that Cyprus and Egypt have already signed several energy agreements and memoranda of cooperation and that technical preparations for gas transport and processing are well advanced. Based on current planning, he said, “the first natural gas from Cronos is expected by late 2027, an optimistic but not unrealistic timeline”.
He added that for the first time, Cypriot gas fields are progressing toward concrete agreements that make their actual development possible, enabling Cyprus to finally bring its offshore resources to production.
On the commercial front, Papanastasiou said negotiations for the sale of gas from Cronos are under way, noting that project economics will depend heavily on the agreed sales price. As the selling party, Cyprus is seeking a price that ensures the project’s viability, he noted.
While Cyprus currently lacks infrastructure to use natural gas directly, the Minister did not rule out that future LNG cargoes from Damietta could be transported to Cyprus for regasification and domestic use, leveraging the LNG terminal under development at Vasilikos.
He also referred to the memorandum of understanding between Energean and Cyfield for potential supply of natural gas to Cyprus via a pipeline from Israeli fields. “These projects are being evaluated,” he said, adding that two proposals are currently on the table and must be assessed by the government to determine the optimal path for importing natural gas into Cyprus.
(Source: CNA)
