LNG

The Government of Cyprus said it was in alignment with US major Chevron Corp. on the imminent development of the Aphrodite natural gas field in the Eastern Mediterranean, the new regional natural gas and LNG hub despite security concerns over the ongoing conflict.

Chevron Corp., the US energy major and global LNG producer, has re-started production from the Tamar natural gas field supplying Israel, Jordan and Egypt from East Mediterranean platforms and pipelines following its closure for more than a month by the Israeli government in the wake of attacks against Israeli civilians by Hamas terrorists from the Gaza Strip.

NewMed Energy, the Israeli company with a stake in the Aphrodite natural gas field offshore Cyprus, said talks would continue with the Cypriot Government after the rejection of a new field development plan that includes transporting pipeline gas to Egypt for liquefaction and export to Europe as LNG or for domestic use.

The Cypriots are in favour of the Aphrodite volumes being shipped to Egypt, though are against the new plan that does not include a previously outlined floating gas processing plant at the field in Cypriot waters.

The partners in the Aphrodite licence are NewMed and energy majors Chevron Corp., the operator of the Aphrodite field, and UK-based major Shell.

The Shell stake came from its acquisition of BP Group and Chevron’s from buying Noble Energy.

The field is located in Block 12 of the Cypriot Exclusive Economic Zone (EEZ) 170 kilometres (106 miles) offshore the Cypriot city of Limassol and is estimated to hold around 4.4 trillion cubic feet of natural gas.

“The Partnership respectfully reports that, according to a letter of reply delivered to the project's operator, Chevron Cyprus Limited, the government of Cyprus has decided not to approve the Updated Plan, and has invited the partners in the Aphrodite Reservoir to continue the discussions on the matter in early September 2023,” NewMed explained.

New plan

According to the Updated Plan, the production of natural gas from the Aphrodite field and the processing thereof would be done through the construction of a subsea pipeline and connection to existing offshore and onshore infrastructure in Egypt, without the construction of a floating production and processing facility within the area of the Reservoir.

“The letter of reply states several reasons for the decision of the Cypriot government not to approve the Updated Plan, including the claim that the Updated Plan is expected to increase the technical and commercial complexity of the project, and is not expected to produce the advantages put forward as detailed in the report of 31 May 2023,” NewMed added.

“The partners in the Aphrodite Reservoir, with the assistance of their outside counsel, intend to consider the implications of the decision by the government of Cyprus and are preparing for the continued discussions,” stated NewMed.

Scheduled for commissioning by 2026, the Aphrodite gas field will be capable of delivering more than $9 billion of direct economic benefits while providing energy independence to the Republic of Cyprus.

The Israeli company, headquartered at Herzelia, north of Tel Aviv, said that the updated plan was expected to accelerate and reduce the cost of development.

LNG needs

Analysts say that the Aphrodite volumes are likely to be directed to the Egyptian Idku liquefaction plant east of Alexandria where Shell is the operator.

NewMed has a 30 percent shareholding in the Aphrodite licence while Shell and Chevron each own 35 percent.

NewMed’s other main asset is its large stake with partners in the Leviathan gas field offshore Israel, which is one of the largest in terms of its customer base in the East Med.

Leviathan is the subject of continuing pre-engineering work and discussions for the promotion of a Leviathan field expansion and the development of a floating LNG project.

The Leviathan field already supplies the Israeli domestic market as well as exporting pipeline gas to Egypt and Jordan.

Leviathan project shareholders are the NewMed Partnership with 45.34 percent, Chevron subsidiary, Chevron Mediterranean Ltd with 39.66 percent and Ratio Energies with 15 percent.

NewMed was formally known as Delek Drilling and changed its name to NewMed Energy in February 2022.

The third ministerial meeting of energy ministers is taking place of the 42-nation Union for the Mediterranean (UfM) and what is the biggest regional gathering of natural gas and LNG importers, exporters and developers.