Pegasus and Glaucus join Cypriot gas fields pumping our way

Egypt agreed with QatarEnergy and ExxonMobil to receive and re-export gas from Cyprus’s Pegasus and Glaucus fields through Egyptian pipeline networks, processing plants, and liquefaction facilities at Idku and Damietta. The framework would see Egypt collect transit and processing fees, the Arabic press reports, citing an unnamed government official. The arrangement follows an MoU signed in late May to explore how to link Cypriot gas discoveries to the country’s energy infrastructure.

The two fields — part of a block operated by ExxonMobil (60%) and QatarEnergy (40%) — are targeting production of 1 bcf/d by 2030, with recoverable reserves estimated at 7 tcf. Gas will first travel via subsea pipelines to Egypt, then be processed at facilities that could include Zohr or Burullus, liquefied at Idku and Damietta, and finally re-exported to global markets.

Egyptian infrastructure prevailed over two alternative options, including dedicated production/liquefaction facilities inside Cyprus and floating production units near the concession area. The fields’ proximity to Egyptian territorial waters gave the country a competitive edge, as did ExxonMobil’s existing concession blocks in Egypt. Egypt’s gas network can handle c. 9 bcf/d, with surplus processing capacity on the Mediterranean coast exceeding 2 bcf/d and combined LNG export capacity at Idku and Damietta reaching c. 1.9 bcf/d, according to the official.

Why it matters: Egypt remains home to the Eastern Mediterranean’s only large-scale LNG export facilities through the Idku and Damietta liquefaction plants, with a combined nameplate capacity of roughly 16.7 bcm per year, PM Mostafa Madbouly said on Saturday (watch, runtime: 2:25). To replicate a single liquefaction plant like Idku would take competitors five to seven years and more than USD 10 bn, Madbouly added.

IN CONTEXT- Pegasus and Glaucus would become the third Cypriot gas development routed through Egyptian infrastructure. Egypt and Cyprus signed agreements in October to move gas from the Eni-operated Cronos field (3.1 tcf estimated reserves) to Egyptian processing and liquefaction facilities, with initial deliveries expected in 2027 at c. 500 mmcf/d. Two months ago, Egyptian Natural Gas Holding Company signed a 15-year gas sales agreement to purchase the entirety of Cyprus’s 3.7 tcf Aphrodite field output, underpinned by a USD 2 bn+ subsea pipeline. Total Cypriot gas inflows heading our way are expected to reach c. 1.3 bcf/d by end-2028 from Cronos and Aphrodite gas fields.

What’s next? Watch out for a gas sales agreement and host government agreement that lock in the fee structure and pipeline routing. Egypt is targeting a return to gas exports by 2027, backed by expectations that domestic production will rise to 6.6 bcf/d — Pegasus and Glaucus add volume behind that target, though they are slated to arrive later, in 2030.

Upping our own LNG

The government is aiming to add 120 mmcf/d of natural gas before the end of June by connecting nine new wells across the Mediterranean, Nile Delta, and Western Desert at a cost of c. USD 100 mn, the Arabic press reports, citing an unnamed government official.

The breakdown: Apache leads with 45 mmcf/d from three new wells at the Jumanah field in the Western Desert; Eni adds 40 mmcf/d from the deepwater Nidoco-2 well in the Mediterranean; and Cheiron Petroleum brings 20 mmcf/d online from Badr-15 in its Western Desert concession. Dana Gas, Capricorn Energy, and HBS will add 15 mmcf/d from three new onshore wells within their respective concession areas.

Why it matters:Although not a huge volume, this new output helps offset the country’s natural depletion rate of roughly 100 mmcf/d per month, keeping production from slipping further below the 4 bcf/d mark.