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Cyprus’ offshore Aphrodite gas field to be linked to Egypt: NewMed

Partners in the Aphrodite natural gas field including Israel’s NewMed Energy, have announced their intention to build a subsea pipeline.
02.06.23 | Source: Daily News Egypt


Partners in the Aphrodite natural gas field, located offshore Cyprus, including Israel’s NewMed Energy, have announced their intention to build a subsea pipeline. The pipeline will connect the field to an existing processing and production facility in Egypt, pending approval from the Cypriot government.


NewMed Energy, which owns a 30% stake in the Aphrodite field, presented an updated plan to the Cypriot government for the development of the reservoir, including gas processing and production. The other partners in the field are energy giants Chevron and Shell, each with a 35% share. Chevron, the operator of the field, expects the new plan to lower the originally estimated development costs and bring forward the production start of natural gas from the reservoir by using existing infrastructure in Egypt.


Discovered in 2011, the Aphrodite natural gas field holds an estimated 124 billion cubic meters of gas. It is located about 170 kilometres south of Limassol in Cyprus and 30 kilometres northwest of Israel’s Leviathan gas reservoir. The total cost of the development plan, including the installation of pipelines to target markets, is estimated at $3.6bn.


Why does it matter?


NewMed Energy CEO Yossi Abu stated that regional ties will create opportunities for collaborations and infrastructure-sharing to meet the global demand for natural gas. The company is making significant progress with the development of the Aphrodite reservoir according to the work plan.


Israel and Egypt have recently emerged as significant players in the global gas market due to the major offshore gas discoveries in their respective territories.


NewMed Energy is also seeking to capitalize on this trend by supplying natural gas from the Aphrodite field to the domestic market in Cyprus, as well as exporting it by pipeline to other markets, including the Egyptian market and the global LNG market.


While the supply of natural gas from the Aphrodite reservoir is not expected until 2027 at the earliest, the development of this resource could have far-reaching implications for the future of the global gas market.


In June 2022, Egypt and Israel signed a memorandum of understanding to boost natural gas exports to Europe. This comes as Europe seeks to reduce its dependence on Russian energy imports.


The framework agreement signed with the European Union (EU) will be the first to allow for “significant” exports of Israeli gas to Europe through Egypt, according to Israel’s energy ministry. Under the agreement, the EU will encourage European companies to participate in Israeli and Egyptian exploration tenders.


The deal was signed during the East Mediterranean Gas Forum hosted by Egypt, a grouping established in 2020 that aims to increase gas trade between regional states including Israel, Greece, Cyprus, Italy, France, and Jordan. The signing took place during a visit to Cairo by European Commission President Ursula von der Leyen.


In 2018, Delek Drilling and Noble Energy, the operators of Israel’s largest natural gas fields Tamar and Leviathan, signed two 10-year agreements worth $15bn with the Egyptian company Dolphinus Holdings to export Israeli natural gas to Egypt.


 In 2019, Delek Drilling and Noble Energy, and Dolphinus Holdings established a joint venture under the name EMED. The joint venture bought a stake from East Mediterranean Gas Company, the owner of the Arish-Ashkelon pipeline, in a deal worth $518m, paving the way for Israeli gas exports to Egypt. Israeli gas exports to Egypt are set at a total of 85.3 billion cubic meters over 15 years.


Egypt aims to become a regional gas hub by leveraging its existing LNG plants in Idku and Damietta, as well as its import of gas from Israel and Cyprus for re-export to other markets. The country’s existing export infrastructure includes not only the two LNG plants but also two pipelines: the Arish-Ashkelon Pipeline and the Arab Gas Pipeline (AGP). 


The Damietta LNG complex is located 60 kilometres west of Port Said and has one train with a total capacity of 7.56 bcm per year of LNG. The Idku LNG complex is located 50 kilometres east of Alexandria and has two trains with a total capacity of 11.48 bcm per year. The total LNG export capacity stands at about 19 bcm per year.


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