Eni, TotalEnergies strike deal to pipe Cypriot gas to Egypt

Italy’s Eni and France’s TotalEnergies, partners in Cyprus’ offshore Block 6, have signed a host government agreement (HGA) with Egypt and Cyprus for the development of the site’s gas resources, they announced on February 17. The agreement sets the framework for advancing the Cronos gas field, with the companies working closely with Cypriot authorities on the development and production plan.

The signing ceremony was attended by Egyptian Petroleum Minister Karim Badawi and Cypriot Energy Minister George Papanastasiou. Egyptian President Abdel Fattah El-Sisi and Cypriot President Níkos Christodoulídis were also present.

The Cronos gas field was discovered at Block 6 in 2022 using the Tungsten Explorer drillship and was further appraised in February last year. Under the agreement, the field’s gas will be processed at Egypt’s Zohr facilities before being liquefied at the Damietta LNG plant for export to Europe. The field is estimated to hold over 3 trillion cubic feet (85bn cubic metres) of gas and there are additional untapped resources at Block 6, including the Zeus discovery made in 2022.

Eni operates Block 6 with a 50% interest, while TotalEnergies holds the remaining interest. The pair are also partners at Blocks 7 and 11 off Cyprus. Eni also has a 50% interest in Damietta LNG, through its subsidiary IEOC. 

Eni described the agreement as a key step in establishing an Eastern Mediterranean gas hub, leveraging Egypt’s existing hydrocarbon infrastructure. CEO Claudio Descalzi commented: “This agreement paves the way to bring Cyprus’ gas to the market in a timely fashion, contributing to energy security and competitiveness of energy supply. This project leverages Egypt’s existing infrastructure, including export facilities, which are a key enabler for developments in the Region. Egypt and Cyprus reaffirm their roles in the emerging energy hub of the Eastern Mediterranean, which is set to play an increasing role in the global gas supply in the near future.”

Julien Pouget, senior vice president for upstream in Middle East and North Africa at TotalEnergies, stated that the major was “very pleased to be part of the opening of an export route through Egypt for Cyprus gas. This host government agreement represents a major step in valorising the Cyprus gas through available LNG capacities in Egypt, contributing to Europe energy security by bringing additional LNG volumes.”

This agreement is one of two deals signed between Cyprus and Egypt to develop Cypriot gas resources using Egyptian infrastructure. The second agreement involves Chevron, with Minister Badawi, Minister Papanastasiou, and Chevron International’s president for exploration and production, Clay Neff, as signatories. These deals are seen as a significant step in strengthening energy cooperation between the two countries while discussions continue to bring additional Cypriot gas to Egypt.

Separately, El-Sisi and Christodoulídis also oversaw the signing of an agreement between Egypt’s Ministries of Petroleum and Mineral Resources, Electricity and Renewable Energy and Saudi Arabia’s Ministry of Energy. The deal aims to develop a joint executive plan for energy cooperation, including energy efficiency improvements in Egypt.

The plan includes the establishment of technical standards, training programs, and mechanisms to enhance energy service companies and infrastructure. Financing options for energy efficiency projects will also be explored. Additionally, discussions are underway to create a joint entity for renewable energy efficiency projects in Egypt, in collaboration with Saudi Arabia’s Tarsheed Foundation.