Egypt and Cyprus Sign Energy Deal to Boost Mediterranean Gas Exports

Zohr facilities will process the gas in Egypt before liquefying at Damietta and shipping it to Europe.

Egypt and Cyprus are signing agreements that allow the gas from Cyprus’ offshore reserves to be sent to Egypt to turn it into liquid and reexport to Europe since both countries are trying to strengthen the Eastern Mediterranean’s position as an energy hub.

They will use Egypt’s current infrastructure to process and ship the natural gas to European markets. They have signed an agreement at the 2025 Egypt Energy Show to legally formalize the long-awaited proposal to connect the Cypriot (a country in the Middle East) deposits to Egypt’s liquefied natural gas (LNG) facilities.

Based on their agreement, the gas collected from the Cypriot site, Cronos Block 6, is licensed by an association of companies consisting of Eni of Italy and Total of France. Zohr facilities will process the gas in Egypt before liquefying at Damietta and shipping it to Europe.

Eni is Egypt’s leading energy producer, producing about 280,000 barrels of oil equivalent per day (boe/d) in 2024. Eni runs in Egypt through its wholly owned subsidiary, International Egyptian Oil Company (IEOC), and has a 50% share in the Damietta Liquefied natural gas (LNG) plant.

The second memorandum of agreement described how the gas is processed from the offshore Aphrodite field in Cyprus and delivered to Egypt for processing under the license of an association led by Chevron.

Significant gas discoveries have been made in the east Mediterranean in recent years. Since there has been a disruption in the energy supplies from Russia after it invaded Ukraine in 2022, Europe has been focusing its attention on getting supplies elsewhere.

Cyprus’s Presidency stated that the agreement’s goal is not to encourage exploiting the deposit of energy. The deal was to increase the opportunities to have energy cooperation with Egypt. It will also help contribute to regional stability and strengthen the country’s geopolitical position in the Eastern Mediterranean.

Cypriot officials have stated earlier that gas from Block 6 Cronos will come online only in 2026 or 2027. Cronos gas production is estimated to be over 3 trillion cubic feet (tcf).

Aphrodite holds around 3.5 tcf of gas. In a stock exchange statement, association member Israel’s NewMed stated that it anticipates gas to go online in 2031.

In a filing update, the non-binding Memorandum of Understanding (MoU) called for national gas utility, EGAS, to become the sole buyer of the gas generated by Aphrodite. The partners will get an option to buy a specific amount of gas delivered to EGAS as LNG.

After months of arguing over a development plan, Cyprus and the Chevron-led association have reached an understanding to sign the Aphrodite deal.

The agreement is crucial for Egypt, which has been trying to get into agreement with its neighbouring countries amid a sharp decline in its output in the last few years.

The government, which has been trying to pay back the debt to the foreign oil companies, was stopped by the foreign exchange crisis, which affected the oil field investment.

In June 2024, Egypt’s gas output dropped to its lowest level since 2017, and the government’s imports of liquefied natural gas increased to their highest level in six years.

Officials expect to resume exports by the end of 2027 after a $57 billion bailout by the United Arab Emirates (UAE). The International Monetary Fund (IMF) and others helped to bring the currency constraints back to normal.

Egypt recently signed a $3 billion LNG supply agreement with Shell and TotalEnergies to meet their domestic demand of 2025.

Prime Minister Mostafa Madbouly, has emphasized the need to increase its production in its Zohr gas field, where operator Eni has resumed drilling after its output lowered to 1.9 billion cubic feet per day in early 2024.