The deals signed at the 2025 Egypt Energy Show formalise a long-anticipated plan to link Cypriot reserves to Egypt’s liquefied natural gas (LNG) facilities, a move that leverages Egypt’s existing infrastructure to process and ship natural gas to European markets.
Monday's agreements involve gas extracted from one Cypriot site, Cronos Block 6 - now under licence to a consortium of Italy's Eni (ENI.MI), and France's Total (TTEF.PA), - to be processed at Egypt's Zohr facilities before being liquefied at Damietta and exported to Europe.
A second memorandum of understanding outlines a framework of processing gas from Cyprus' offshore Aphrodite field, under licence to a Chevron (CVX.N), -led consortium, which will also be sent to Egypt for processing.
The east Mediterranean has yielded some major gas discoveries in recent years, while a disruption in energy supplies from Russia after its invasion of Ukraine in 2022 has sharpened Europe's attention on securing supplies elsewhere.
"The essence of these agreements is not limited to promoting the exploitation of deposits, but broadens the prospects for energy cooperation with Egypt, while contributing to regional stability and strengthening our country's geopolitical position in the Eastern Mediterranean," a statement from Cyprus's Presidency said.
Cypriot officials have previously said they expect gas from Block 6 Cronos to possibly come online in 2026 or 2027. Cronos gas in place is estimated at more than 3 trillion cubic feet (tcf).
Aphrodite holds an estimated 3.5 tcf of gas. Israel's NewMed (NWMDp.TA), a member of the consortium, expects gas to come online in 2031, it said in a stock exchange filing on Sunday.
In a Monday filing update, it said the 'non-binding' MoU envisaged that Egypt's national gas company, EGAS, would be the sole buyer of the gas produced from Aphrodite, while the partners would be granted an option to purchase specific quantities of the gas sold to EGAS as LNG.
The signing of the Aphrodite deal follows a recent breakthrough between Cyprus and the Chevron-led consortium after months of disagreement over a development plan.
The agreement provides a boost for Egypt, which has struggled with declining domestic gas production and last year returned to being a net importer of natural gas.
Egypt recently signed $3 billion worth of LNG supply deals with Shell and TotalEnergies to cover domestic demand for 2025.
Egyptian Prime Minister Mostafa Madbouly has emphasized the country's need to ramp up production at its own Zohr gas field, where operator Eni has resumed drilling after output dropped to 1.9 billion cubic feet per day in early 2024.
