Egypt to transit and liquefy Cypriot gas from Pegasus and Glaucus fields at Idku and Damietta

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.

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.