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US weighs in on Aphrodite gas field dispute: Washington is backing US oil and gas giant Chevron’s plans to develop Cyprus’ massive Aphrodite natural gas field — which include building a pipeline linking the field to Egypt — after Cyprus turned down the plans last week, Reuters reports, citing two industry sources and a US source.
Cyprus’ problem: Cyprus wants Chevron to stick to its previous plan to build a floating gas processing plant at the Aphrodite field. “The modification has been rejected. The expectation of the Republic of Cyprus is [that] the consortium honors what was mutually agreed by the parties in 2019,” Cypriot Energy Minister Giorgos Papanastasiou was quoted as telling Reuters.
REMEMBER- The consortium developing the Aphrodite field — Chevron, Shell, and NewMed Energy — in June ditched plans for a floating facility in favor of a subsea pipeline connecting the Aphrodite field to Egypt’s LNG facilities, allowing the gas to be liquefied and exported to Europe. Chevron and Shell both own 35% of the field, while Israel’s NewMed Energy holds the remaining 30%. The parties were given 30 days to reach a new agreement after Cyprus last week rejected the modified plan.
Egypt has been planning a pipeline for some time: Egypt and Cyprus have been talking about laying a pipeline for several years, which Oil Minister Tarek El Molla last year said would be up and running by 2025.
The US standpoint: The US believes linking Aphrodite to Egypt will enable faster delivery of gas to the market with a lower carbon footprint and could also help relieve summer energy shortages here. “Connecting [Aphrodite] to Egypt will help them with peak domestic consumption in the summer, add stability and reduce tensions in the region, and allow exports for Europe,” the US source told Reuters.
We want the gas: Domestic gas shortages have this year hampered Egypt’s efforts to ramp up exports of LNG to Europe as it looks to move away from Russian fossil fuels.The government hopes to increase oil and gas exports by 15% both this year and next to hit USD 24 bn in 2024. We’re set to get more gas from Israel to help meet those ambitious export targets, and the government is encouraging multinational firms to invest in more upstream exploration. That said, Cairo is reportedly unwilling to allow Cypriot gas to take up a sizable portion of its export capacity.
