Italy's Eni signs landmark agreement on sending Cypriot gas to Egypt

Italy's Eni on Feb. 17 signed a landmark agreement with Egypt and Cyprus for the supply of gas from Cyprus's offshore Block 6 to Egypt for onward export to European markets as LNG.

Eni said the deal was a "concrete milestone" towards establishing a gas hub in the East Mediterranean, "capitalizing on Egypt's existing hydrocarbon infrastructure and positioning Cyprus as a gas producer and exporter."

Cyprus is home to several high-profile gas discoveries -- including Aphrodite in Block 12 and Cronos in Block 6 -- but none has yet been developed.

The agreement on Cronos Block 6 resources was signed in Cairo by Eni, Egypt's energy minister Karim Badawi, his Cypriot counterpart George Papanastasiou, and Eni's Block 6 partner TotalEnergies.

Egyptian President Abdel Fattah el-Sisi and his Cypriot counterpart Nikos Christodoulides also presided over the signing.

"This agreement outlines a comprehensive framework enabling a rapid development of the Cronos gas discovery offshore Cyprus," Eni said.

"The gas will be transported and processed in existing Zohr facilities to be then liquefied in the Damietta LNG plant for export to European markets," it said.

'Timely fashion'

Eni is operator of the Zohr field, while its joint venture with Egypt's EGAS operates the 5 million mt/year Damietta LNG export facility.

"This agreement paves the way to bring Cyprus' gas to the market in a timely fashion, contributing to energy security and competitiveness of energy supply," Eni CEO Claudio Descalzi said.

"This project leverages Egypt's existing infrastructure, including export facilities, which are a key enabler for developments in the region," Descalzi said.

"Egypt and Cyprus reaffirm their roles in the emerging energy hub of the Eastern Mediterranean, which is set to play an increasing role in the global gas supply in the near future."

Discovered in 2022 and subsequently appraised in 2024, Cronos gas-in-place is estimated at more than 3 Tcf.

"Additionally, Block 6 encompasses further potential resources under exploration and appraisal, including the Zeus discovery made in 2022," it said.

Eni in February last year said a production test at its Cronos-2 appraisal well allowed for an estimated well production capacity in excess of 150 MMcf/d.

A production rate of 150 MMcf/d is the equivalent of some 4.2 million cu m/d -- or 1.5 Bcm/year on an annualized basis.

Cypriot discoveries

Cronos-2 was the fourth well drilled by Eni and TotalEnergies in Block 6, following the gas discoveries of Calypso in 2018 and of Cronos-1 and Zeus in 2022.

The Zeus discovery in 2022 initially had estimated resources of 2-3 Tcf while Calypso was initially flagged in 2018 as a 6-8 Tcf discovery.

As well as the finds in Block 6, Cyprus is also home to the Aphrodite discovery in Block 12 and the gas discovery made with the Glaucus-1 well in 2019 by ExxonMobil.

The total gas resource in Cyprus could now be as high as 25 Tcf.

There are also hopes for a new major discovery in Block 5 where ExxonMobil and QatarEnergy last month began drilling the Electra exploration well.

Last month, Badawi and Papanastasiou said they hoped to accelerate work on strategic projects that would allow for gas from fields offshore Cyprus to be piped to Egypt for use in the domestic market or for export to Europe as LNG.

During talks Jan. 24 in Nicosia, the ministers discussed linking Cronos and Aphrodite to Egypt, which would "accelerate the development of the two fields into production at the lowest possible cost," Egypt's energy ministry said in a statement.

The two ministers also recognized Egypt's "multiple capabilities" for the use of Cypriot gas, either consuming the gas in its domestic market or allowing its liquefaction in Egypt and export to global markets.

LNG exports

Egypt has not exported LNG since May last year as its domestic gas production slumped.

Egypt's gas production totaled just 3.69 Bcm in November 2024, according to the latest data published by the Joint Organizations Data Initiative (JODI).

That is the lowest monthly production level since February 2017 and well down on a recent peak of 6.1 Bcm in March 2021.

In November, it imported some 496 million cu m as LNG and a further 866 million cu m as pipeline gas from Israel to help meet demand of 5.01 Bcm.

Egypt deployed a floating LNG import vessel last summer at Ain Sokhna, with imports beginning in June.

It plans to deploy a second FSRU at Ain Sokhna under an agreement between state-owned EGAS and US LNG company New Fortress Energy in the second half of 2025 in light of increasing gas demand, especially in the summer months.

Egypt sees imports of gas from Cyprus as a way to provide feedgas for its two LNG export facilities.