Cyprus-Egypt gas pipeline

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Cyprus-Egypt gas pipeline is a proposed natural gas pipeline, running from Cyprus's Aphrodite offshore gas field to the Damietta Segas LNG Terminal, Egypt.

Location

The pipeline would run from the Aphrodite offshore gas field, Cyprus to Damietta Segas LNG Terminal, Damietta governorate, Egypt.

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Pipeline Details

  • Operator: Shell (35%), Noble Energy (35%), Delek Group (30%)
  • Parent Company:
  • Proposed capacity: 8 billion cubic meters per year
  • Length: 310 km / 192.6 miles
  • Cost: Estimated at US$800 million to US$1 billion[1]
  • Status: Proposed
  • Start Year: 2024

Background

Cyprus's offshore Block 12, within which the Aphrodite field is located, is believed to hold 100-170 billion cubic meters of gas. In May 2018, Egyptian Petroleum Minister Tarek El Molla and Cyprus Energy Minister Yiorgos Lakkotrypis agreed on plans to develop a $1-billion pipeline from the gas field to Egypt's Damietta Segas LNG Terminal. The Aphrodite field is owned by UK-based Shell (35%), U.S.-based Noble Energy (35%), and Israel-based Delek Group (30%); it is unclear whether these companies would be building the pipeline, or other companies.[2][1][3][4]

In May 2019, a Cyprus firm and Egypt signed an estimated 2 billion euro deal to lay a 310-kilometre subsea electricity cable that will be the first interconnector between Africa and Europe. It is estimated the project implementation will take 36 months from the start of construction with the lowest point 3,000 metres below sea-level. Phase 1 will see the interconnector carry a capacity of 1,000MW which can be upgraded to 2,000MW at a later stage. Cyprus has become a major hub for the transmission of electricity from Africa to Europe. Egypt establishes itself as a regional energy hub for the transmission of electricity from Africa to the Arabian peninsula.[5]

In June 2019 the government of Cyprus signed a preliminary agreement with energy companies Noble Energy, Shell and Delek Drilling for the allocation of revenues from the utilization of the Aphrodite field.[6]

In July 2019, Cyprus's former Energy Minister Georgios Lakkotrypis suggested that one funding source for the pipeline could be the European Investment Bank (EIB).[6] These comments were made a few months before the EIB's publication of a new Energy Policy which ruled out future financial support from the bank for fossil fuel projects after 2021. Four unnamed investment firms were also reported to be interested in financing the construction of the pipeline, but as of the end of 2020 there has been no confirmation of financial backers coming forward to support the project.[7]

Chevron launched a $5 billion takeover bid for Noble Energy in July 2020, which, according to S&P Global, "could be the boost" that the Aphrodite development plan including the subsea pipeline to Egypt "needs to finally get off the ground."[8]

Articles and resources

References

  1. 1.0 1.1 Cyprus-Egypt natural gas pipeline to cost $800 million-$1 billion, Reuters, 7 May 2018.
  2. Cyprus Sees Gas Deal With Egypt as Cairo Weighs Israeli Supply, Bloomberg, 20 Feb. 2018.
  3. Cyprus’s potential export pipeline to Egypt and recent exploration success, Offshore Technology, 25 June 2018.
  4. Aphrodite gas field, Wikipedia, accessed July 2018.
  5. ENERGY: Cyprus-Egypt deal to build power link to Europe, Financial Mirror, accessed May 2019.
  6. 6.0 6.1 Egypt and Cyprus Launch a New Gas Route, About Energy, Jul. 31, 2019
  7. Global investment firms interested in funding Cyprus-Egypt gas pipeline, Energy Egypt, Oct. 11, 2018
  8. Elliott, Stuart (September 2, 2020). "FEATURE: Cyprus eyes progress on Aphrodite gas development, pipeline plan". S&P Global Platts. Retrieved August 13, 2021.

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