Cyprus signs the first gas exploitation contracts in its history for 1.8 billion dollars

Cyprus signed on Monday the first gas exploitation contracts in its history for 1.8 billion dollars, with the French hydrocarbon giants TotalEnergies and Italian Eni, announced the Cypriot president. Exploitation of the Cronos deposit, discovered in 2022, is due to start in the first half of 2028. The project targets a production plateau of 500 million cubic feet per day of liquefied natural gas (LNG), or around 2.8 million tonnes per year (Mtpa).

The reserves of this deposit, located approximately 185 km southwest of the Cypriot coast, are estimated at more than 3,000 billion cubic feet by Eni. In a press release, the Italian group welcomed “a key step towards the commercial development of Cyprus’ first gas project”.

Production is aimed primarily at European countries currently struggling to find new sources of supply as wars in Ukraine and Iran upend global energy markets. In a press release, the Cypriot President, Nikos Christodoulides, underlined “the considerable geopolitical and economic implications” of this exploitation and specified that the amount of the contracts amounted to more than 1.8 billion dollars. » READ ALSO - Russia claims to have sold $320 billion worth of hydrocarbons to Europe since 2022 Exported mainly to European markets Until now, the gas fields of Cyprus, the first of which was discovered in 2011, had remained unexploited commercially.

The agreements signed on Monday cover the engineering, construction, installation and drilling works necessary for the exploitation of the deposit located in Block 6 of the exclusive economic zone of Cyprus. The project was approved by TotalEnergies and Eni on July 28. The natural gas will be processed in Egypt, notably through infrastructure linked to the large Zohr gas field, and liquefied at the Damietta port terminal, before being exported mainly to European markets.

The use of existing infrastructure should make it possible to reduce costs and accelerate the arrival of gas on the market, while deepening links with Nicosia and Cairo. Eni and TotalEnergies hold the majority of the exploration “blocks” – seven of the thirteen located in the south of the Mediterranean island – for which the Cypriot government has granted licenses. In the Eastern Mediterranean, other large natural gas reserves have been discovered in Israel and Egypt.

Machine-translated from French