Minister of Energy, Commerce and Industry, Giorgos Papanastasiou, has called on Chevron, the company responsible for the development of "Aphrodite" gas field to honour its signature.

The call came ahead of a meeting with Robert Clay Neff, President of Chevron Middle East, Africa, South America Exploration and Production Company with Cyprus President Nikos Christodoulides and the conclusion of the dispute resolution period regarding the development plan of the field.

Speaking before the parliamentary committee on Finance, where he presented his ministry's budget for 2024, Papanastasiou stressed that the government insists that "the parties honour their signature," referring to the original plan of the previous operator, Noble Energy. This plan concerns the construction of the Floating Production Unit (FPU) over the field. The FPU will allow for greater gas recovery, thus maximizing revenue for the Republic of Cyprus.

"Our predictions were that in the first years of production, there would be gas, but in the following five years, which would constitute the revenues for the Republic of Cyprus, there would be no gas. Chevron's proposal leaves us in serious uncertainty. The field will be developed on the basis of Chevron's interests during the first period, and during the second period, there will be no gas," he explained. The FPU, as he further clarified, processes the gas by removing petroleum derivatives, water, and particles.

He also noted that the initial proposal of the development plan submitted in 2019 was "very correct, but it should be honoured by all parties".

He pointed out that the government shows understanding as regards the company channeling capital investments towards the major Israeli fields, Tamar and Leviathan. "But we also understand that the Republic of Cyprus. Cyprus has given a lot and received nothing. That's why we insist that the parties honour their signature," he underlined.

Furthermore, he noted that the "Aphrodite" field is an asset without risks. "It is a developmental field, ready for sale. That's why we insist on infrastructure," he said.

ENI speeds up drilling operations in 'Kronos 2’ target

Regarding activities in the Cypriot Exclusive Economic Zone (EEZ), Papanastasiou referred to the impending drilling by ENI/TotalEnergies at the "Kronos 2" target in Block 6, saying that synergies were being explored for the complex encompassing Blocks 6, 7, 10, and 11.

Potential synergies, he said, concerned the southwestern cluster of reservoirs, focusing on 'Glaucus,' 'Zeus,' and 'Kronos' targets. He added that "if these are connected, the quantity can justify any direction," either towards Egypt or Cyprus. "Both can be viable projects," he said, noting that sustainability studies for the region's gas transportation to Vasiliko were in progress.

Papanastasiou also highlighted Egypt's high demand for natural gas, noting that all of the neighbouring country's reserves were "empty," except for “Zohr”, which faces water-related issues. The Minister pointed out that ENI urgently needed to send gas through a pipeline to “Zohr” to facilitate the situation and that’s why they were accelerating drilling around 'Kronos'.

Cyprus a shareholder in EuroAsia Interconnector

Regarding the EuroAsia Interconnector project for the Cyprus-Greece-Israel electrical interconnection, Papanastasiou clarified that the state would choose to participate in the share capital of the implementing entity and will consult with the European Commission, which supports the project through the "Connecting Europe Facility," to use the €100 million included as a loan under the Recovery and Resilience Plan.

He noted that the 2024 budget includes a €25 million allocation for the state's participation in the entity, and that private investors from countries like Saudi Arabia and Israel have shown interest too. The cost of the interconnection, which has already received €580 million in EU funding, increased to €1.9 billion from the initial €1.5 billion due to delays and material cost hikes. The Minister of Energy, however, stressed that the government’s decisions would be made after an evaluation by a reputable external agency with which the Republic has contracted.

Papanastasiou noted that the project would address the issue of energy isolation and energy supply security.

First gas in Cyprus in July 2024

Furthermore, the Minister said that the first natural gas to be imported for electricity generation in Cyprus would be liquefied natural gas (LNG) for the Public Gas Company’s (DEFA) terminal in Vasiliko. As he explained, the floating storage regasification unit (FSRU) "Prometheus" will be delivered by the Chinese contractor in November or December, and that the jetty was under construction. The first gas, as he said, is expected to flow in July 2024.