Cyprus gas field development gets $4 billion price tag

The consortium developing the Aphrodite gas field off Cyprus has submitted a development plan to the country’s government valuing the field at $4 billion, Reuters reported, citing one of the partners.

“According to the updated plan, production and processing of natural gas from the reservoir will be achieved by building an independent floating production unit to be positioned above the Aphrodite reservoir,” Israel’s NewMed Energy said.

NewMed Energy is partnering with Chevron and Shell to develop the Aphrodite field, which produces approximately 800 million cubic meters of natural gas per day at full capacity. The gas extracted from the field would be sent to Egypt. There are also plans to convert some of the gas into LNG and export it globally, according to the NewMed Energy website.

The biggest potential buyers of Cypriot gas are the Europeans. The opportunity made headlines two years ago amid the European gas crisis, when Chevron, Shell and NewMed Energy drilled exploratory wells at Aphrodite.

“Europe is a good potential customer for Cypriot gas as the EU has confirmed that natural gas will remain a bridge fuel until 2049 as part of the green transition, so companies now have the comfort of being able to secure long-term contracts long”, Cyprus. Energy Minister Natasa Pilides told Bloomberg at the time.

However, development of the Aphrodite field has been delayed by negotiations over changes to the production sharing scheme between the three partners and the Cypriot government following Chevron’s acquisition of the original exploration license holder, Noble Energy.

Now these seem to have been resolved and development could move forward. The same may be true of other gas discoveries offshore Cyprus, such as the Glaucus field, discovered by Exxon and Qatar Petroleum, and the Calypso field, a project of Eni and TotalEnergies.

By Charles Kennedy for Oilprice.com

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