Cyprus & World News

ENERGY: Global investment players eye funding of Cyprus-Egypt pipeline

10 October, 2018

Four major investment firms are interested in financing the billion-dollar construction of a pipeline to transport Cyprus natural gas to Egypt.

This is what a Cypriot official involved in the energy sector has told Bloomberg.

The banks and investment houses have asked Nicosia for more information on the progress of the Aphrodite field, whose gas Shell is considering buying for its facility in Egypt, said Sofronis Papageorgiou, head of commercial affairs at the Cyprus embassy in Israel.

He declined to disclose the names of the firms.

Aphrodite has sat undeveloped since its discovery in 2011, but companies and governments are working to ensure the block is exploited.

Last month, Egypt and Cyprus signed an inter-governmental agreement to facilitate commercial deals, while the owners of the gas pool -- Shell, Texas-based Noble Energy and Israel’s Delek -- continue to hammer out a contract to service the liquefied natural gas plant in Idku, Egypt.

Interest from potential investors is “another sign that things are moving in a positive direction,” Papageorgiou told Bloomberg.

The pipeline is estimated to cost between $800 million and $1 billion, Egyptian Petroleum Minister Tarek El Molla said in May.


There are still obstacles to clear before the energy firms sign a deal. The Aphrodite partners are renegotiating the government’s level of royalties – and want to overturn a 60-40 split in their favour.

Israel and Cyprus are trying to resolve a dispute about the delineation of the border between Aphrodite and a neighbouring Israeli pool.

The two countries are making methodical progress on the disagreement, striving to avoid international arbitration that could delay a solution, Papageorgiou said.

“There is a good climate between the teams,” he said. “The discussions aren’t aggressive, and everyone has good intentions.”

A spokeswoman for Israel’s energy ministry said the delineation of the gas fields is still under discussion.

Developing Aphrodite is one piece of the energy jigsaw, Cyprus is also involved in an ambitious plan to combine gas from the eastern Mediterranean and pipe it to southern Europe. There too progress is moving at a slow but steady pace, Papageorgiou said.

Officials from the four countries working on the East-Med project -- Greece, Israel, Italy and Cyprus -- met in Jerusalem last month to continue working on a separate intergovernmental agreement and are planning another gathering soon in either Athens or Rome.

“It’s a hectic and difficult process,” Papageorgiou said. “But everyone has a clear mandate from their governments to get this done by the end of the year.”