Cyprus gas, a new export line, and fresh Western Desert drilling

A Cypriot gas corridor, a Mediterranean oil export pipeline, and a fresh USD 208 mn drilling deal in the Western Desert — three energy developments that sketch out the same picture: Egypt methodically building the infrastructure, supply, and partnerships it needs to become an energy hub on the southern Mediterranean shore.

Cyprus eyes 2028 for Egypt export route

Cyprus wants to route natural gas exports through Egypt by 2028 — from the offshore Cronos field to European markets, Cypriot President Nikos Christodoulides said ahead of a cabinet meeting that approved the field’s development and production plan alongside its commercial framework.

BACKGROUND- Last year, the Oil Ministry signed three agreements with field partners Eni and TotalEnergies to transport and process Cronos gas through Zohr-linked infrastructure, liquefy it at Damietta, and re-export it to Europe. The 2028 target aligns with statements from both former Cypriot energy minister George Papanastasiou last year and current Minister Michael Damianos in March, who both walked back an earlier 2027 timeline.

The wider picture: North Africa’s race to supply Europe is intensifying, with Algeria, Morocco, and Libya all jostling for a bigger share of the bloc’s energy demand, as we explained in depth last month .

The missing link on the Mediterranean coast

The Oil Ministry plans to finish a new pipeline along the Mediterranean during 2H 2026 — which will transport refined petroleum products from the Midor refinery to Al Hamra port, Al Arabiya reports, citing an unnamed government source. Discussions are underway to secure EGP 700-800 mn to wrap up the remaining construction work.

REMEMBER- This has been in the works for a while. In 2024, Petrojet completed more than half of a new EGP 1.7 bn fuel transport line connecting Midor to Al Hamra, designed to supply the city of El Alamein and its surrounding areas with refined fuel, with export optionality. Earlier this year, the port’s operator Wepco began offering crude storage and trading to third parties, targeting around 88 mn barrels in trade volumes next fiscal year while doubling storage capacity to 5.3 mn barrels.

DATA POINT- Egypt exported USD 1.4 bn worth of fuel shipments during 1Q, up from some USD 900 mn during the same period last year.

Why it matters: The new pipeline was the missing link in a two-way system. An existing flow arrangement already moves crude from Al Hamra to Midor for refining, and this new route sends the higher-value finished products back for re-export. That loop — import, refine, re-export — is how Egypt is transitioning its energy sector into a processing and logistics hub on the Mediterranean.

And more gas in the ground

The Egyptian General Petroleum Corporation (EGPC) signed a USD 208 mn agreement with Cheiron Energy and Capricorn Energy to fast-track exploration, development, and production across the Badr El Din concession block in the Western Desert, according to a statement from the Oil Ministry. The two companies will use the funds to drill 44 new exploration and production wells and also merge eight existing production fields, while adding new exploration acreage to the concession.

Coming up: The Ministry is also preparing to launch a new oil exploration bid round covering at least 15 blocks during 3Q, with most of the acreage located in the Western and Eastern Deserts, the Arabic press reports, citing an unnamed government source. The new licensing round is expected to launch after the current Red Sea international bid round closes at the end of June.

Why it matters: The government needs every barrel it can get. With output currently at 560k bbl / d and a target of roughly 626k bbl / d by the end of next fiscal year, the math only works if international oil companies are willing to drill.

The strategy: To secure its target of USD 6.2 bn in FDI for the oil sector next fiscal year, the government is moving on multiple fronts: clearing arrears owed to foreign energy firms, with a commitment to fully settle the remaining balance by June 2026; rolling out more flexible, risk-adjusted upstream terms ; and attracting significant FDI commitments — including a USD 19 bn pledge from global energy majors over the next three years.