Cyprus-Egypt Natural Gas Agreements ‘Historic’, Eni says

“A historic agreement was signed with Cyprus and Egypt for the exploitation of the significant natural gas deposits in the Kronos reservoir in Block Six of Cyprus’ Exclusive Economic Zone (EEZ),” the company reported in the publication of its financial results for the first quarter of the year.

It added that the natural gas found in the reservoir will be exported to the European market, “leveraging Eni’s assets and liquefied natural gas capacity in Egypt”.

The company also reported that its total earnings before interest and taxes stood at €3.7 billion for the first three months of the year, with its adjusted net profit standing at €3.4bn. Its gross investment expenditure amounted to €1.9bn.

The company said its financial results were “stable”, as macroeconomic volatility and uncertainty are “offset by the company’s flexibility and choices”.

“These solid first quarter results reflect our continued commitment to our strategy, despite the uncertain macroeconomic environment. We remain financially disciplined and committed to leveraging our competitive advantages, such as exploration, proprietary technologies, and innovative business models,” Eni’s chief executive officer Claudio Descalzi said.

Two agreements were signed by Cyprus and Egypt in February, with the agreement concerning Eni being a ‘host government agreement’, signed by Cyprus, Egypt and the consortium comprising French multinational corporation Total and Eni itself over Block 6 of Cyprus’ EEZ.

This agreement sets Egypt as the “host government” for Block 6 and the Kronos, Zeus and Kalypso gas fields which are present under its seabed, meaning that the gas extracted will be sent to the Segas liquefied natural gas (LNG) terminal in the Egyptian port city of Damietta for liquefaction.

Given the proximity of the Kronos reservoir and Block 6 to Egypt’s ‘Zohr’ gas field, which Eni also operates, Eni will be able to use its own infrastructure to take the Cypriot natural gas to Damietta.

The other agreement was a memorandum of understanding signed by both Cyprus and Egypt, as well as American multinational corporation Chevron, Israeli energy company NewMed Energy, and the BG Group, which is owned by Royal Dutch Shell, and concerns the Aphrodite deposit in Block 12 of Cyprus’ Exclusive Economic Zone (EEZ).

According to the Cypriot government, the agreement “establishes the framework for the effective commercialisation of the natural gas which will come from the field”.

The Cypriot government said the agreements’ “essence is not limited only to promoting the exploitation of the deposits but also broadens the prospects for energy cooperation with Egypt, while contributing to regional stability and strengthening our country’s geopolitical position in the eastern Mediterranean”.

“These two agreements signal the Republic of Cyprus’ determination to promote the sustainable exploitation of its natural resources, with the participation of renowned international energy partners, to strengthen its role as an energy hub in the eastern Mediterranean and to ensure the maximum possible benefit for the Cypriot people,” it said.

It added that with these agreements, it hopes to “achieve more competitive electricity prices and safeguard our country’s energy security”.

Source: Cyprus Mail