Chevron and its partners in the long-delayed Aphrodite gas project in Block 12 of Cyprus’ Exclusive Economic Zone in the eastern Mediterranean have submitted an updated development plan to the Cypriot government hoping to avert termination of their production-sharing agreement (PSA).
Under the updated $4-million development plan the partners pledge to build an 800- MMcf/D floating production unit tied initially to four production wells with natural gas exported via a yet-to-be-built pipeline to the Egyptian gas transmission system, according to Israel’s NewMed, which holds a 30% stake in the field.
The project will also supply the domestic market in Cyprus with an LNG export option still under discussion.
Submission of the updated plan was a reaction to the Cypriot Energy Ministry’s having issued a “notice of breach” to project operator Chevron threatening to terminate the PSA in 3 months if work wasn’t started on front-end engineering and design (FEED).
NewMed described the situation in a news release sent to the Tel Aviv Stock Exchange on 26 August, according to the data service Stockwatch Ltd., which focuses on the Cypriot and Greek economies.
Chevron Cyprus Limited holds a 35% operator interest in Aphrodite with partners BG Cyprus Limited (Shell) 35% and NewMed Energy (30%).
Nothing New: Cyprus Raised Concerns Over Aphrodite Delays in 2023
On 30 April, Cyprus’ Energy Minister George Papanastasiou notified Chevron of the government’s rejection of Chevron’s proposal for an “optimized development plan” for Aphrodite. In a letter to the operator the minister asked the partners to “to promptly confirm in writing their unconditional consent to commence performance of the FEED within 6 months,” Stockwatch reported.
Wrangling over the development of Aphrodite, which holds an estimated 124 Bcm of natural gas, began in August 2023 when the government rejected an earlier development plan based on the original 2019 plan submitted by Noble Energy (the previous operator).
“We updated the development plan according to the instructions of the Cypriot minister of energy and look forward to the plan’s approval to allow swift progress in the development of the reservoir,” The Times of Israel quoted NewMed Energy CEO Yossi Abu as saying.
“The reservoir’s development is another step in the regional collaborations that are evolving around natural gas in the Mediterranean Basin,” he added.
Cross-Border Synergies Exist Between Aphrodite, Leviathan, and Tamar
Chevron is the operator of two other East Med gas projects already in production—Israel’s Tamar and Leviathan gas fields—which export gas to Egypt through the East Mediterranean Gas (EMG) pipeline to Ashkelon in southern Israel for further transport to El-Arish in Egypt.
NewMed partners also with Chevron in Leviathan, and consideration is being given to the possibly of crossing maritime borders from Cyprus to Israel to hook Aphrodite production into Leviathan’s export network via the EMG.
The government of Cyprus wants some of Aphrodite’s gas to flow to the domestic market as well as feed an LNG hub at the port of Vasilikos (between Limossol and Larnaca), but Nicosia’s Chinese partners halted construction of the facility in March, alleging payment arrears.
Meanwhile, conversion of the Etyfa Prometheas LNG carrier into a floating storage and regasification unit (FSRU)—an integral part of the Vasilikos plan—was completed in January but the vessel remains in port in Shanghai.
Discovered in 2011, Aphrodite is located about 170 km (105 miles) south of Limassol in Cyprus and 30 km (18 miles) northwest of Israel’s Leviathan gas reservoir, one of the world’s largest deepwater gas discoveries.
In June 2022, Israel and Egypt signed a memorandum of understanding with the EU that will see Israel export its natural gas to the bloc for the first time. According to the agreement, Israeli gas could be supplied via Egypt’s LNG plants to the EU, The Times of Israel reported.
