Natural gas production from Block 6 of Cyprus’ Exclusive Economic Zone (EEZ) could commence within 2 to 2.5 years, according to Constantinos Hadjistassou, Professor at the School of Sciences and Engineering, Department of Engineering at the University of Nicosia.
Speaking to the Cyprus News Agency (CNA), Hadjistassou also highlighted the multiple benefits this development will bring to the Republic of Cyprus.
He described the agreement concerning Block 6 as the most significant of the two agreements signed in Cairo.
Additionally, he noted that Block 6 contains three gas fields—“Cronos”, “Zeus”, and “Calypso”—with a total estimated capacity of 6.5 trillion cubic feet (tcf).
He added that development is likely to begin with “Cronos”, although other discoveries appear to have greater potential.
However, he pointed out that further appraisal drilling is needed to confirm the exact picture.
“The development agreement for Block 6 is more significant because it is at a more advanced stage due to existing infrastructure,” he said.
“The fields can be developed more quickly and at a lower cost compared to ‘Aphrodite’,” he added.
He explained that the consortium led by ENI aims to develop Block 6 and connect it to Egypt’s “Zohr” field, located approximately 80 km away, using existing subsea pipelines. The gas will then be transported to the Damietta terminal in Egypt.
“The key requirement for Block 6 will be the creation of a platform to extract and clean the natural gas, carry out basic processing, and then compress and transport it via pipeline to connect with ‘Zohr’s’ subsea pipelines,” he explained.
Lower development costs compared to Aphrodite
According to Hadjistassou, the cost of developing the Block 6 reserves will be lower than that of the “Aphrodite” field, which requires the construction of entirely new infrastructure.
Specifically, the most expensive element of the “Aphrodite” development is the pipeline, as it must cover a distance of approximately 320 km to reach Egypt’s Idku terminal.
He added that Block 12 (“Aphrodite”) has confirmed reserves following three drillings. However, its available quantities are smaller than those in Block 6.
Additionally, an agreement between Cyprus and Israel over the “Ishai” field remains pending, despite the approval of its development plan.
In any case, he emphasised that the development costs of Block 12 will be higher than those of Block 6 due to the greater infrastructure requirements.
Next steps for Block 6
Hadjistassou stated that ENI is expected to submit its development plan for Block 6 this summer, while also pointing to Egypt’s significant demand for natural gas, both for domestic consumption and exports.
He noted that the rapid depletion of Egypt’s major “Zohr” field presents an opportunity for Cyprus.
“This creates an opportunity for Cyprus, especially since the consortia operating in both EEZs can easily utilise existing infrastructure to commercialise this gas,” he said.
He further highlighted that appraisal drilling in Block 6 is planned to determine the gas quantities with greater accuracy.
Following this, the consortium will conduct a feasibility study to assess the equipment required for development, which will help estimate the costs.
Once the study is submitted to the Ministry of Energy, the government and the company will evaluate it for approval.
When the company secures approval from the Ministry of Energy, it will proceed with a final investment decision to obtain the necessary financial resources.
Industry cooperation is key
Regarding gas sale prices, Hadjistassou stressed that collaboration between companies is crucial in reducing development costs.
“The key issue is that Cyprus’ domestic needs are small, making exports necessary,” he said.
“At the same time, the discoveries are in ultra-deep waters, requiring substantial investment, which increases costs,” he added.
On international markets, he projected that demand for natural gas would remain high in Asia, particularly in India and China, as well as in Europe.
In addition, he said that Europe is currently importing larger quantities of liquefied natural gas (LNG) from the Middle East and the United States to replace Russian gas.
“Cyprus’ advantage”, he said, “is that it is a European country”.
“Additionally, Egypt is interested in exporting part of this gas to Europe,” he continued. “It remains to be seen at what price this gas can be produced and whether it will be competitive enough to attract buyers.”
He added that LNG is three to four times more expensive than pipeline gas.
What is more professor Hadjistassou emphasised that a coordinated plan for developing all Cyprus’ EEZ fields together to reduce costs would be ideal.
“For this to happen, companies will need state support to provide the necessary framework for collaboration,” he said.
“This could include incentives such as tax breaks or other measures to encourage joint infrastructure development,” he added.
Furthermore, he expressed hope that the Ministry of Energy has a clear strategy and vision to maximise Cyprus’ natural resources.
Major benefits from Cyprus becoming a gas producer
Hadjistassou also underscored the multiple benefits for Cyprus as it transitions into a gas-producing country.
“Egypt provides Cyprus with the vehicle to commercialise its gas discoveries and export to Europe and Asia, securing revenues,” he said.
Timely gas development will also ensure that Cyprus is not overtaken by the energy transition, which could marginalise hydrocarbons.
Additionally, he noted that Cyprus’ geopolitical position would be strengthened, further enhancing its relations with Egypt.
“This will also send a strong message to Turkey that the Republic of Cyprus is a sovereign state capable of utilising its natural resources for the benefit of all Cypriots, including Turkish Cypriots,” he stated.
From a commercial perspective, he said, companies will be able to recoup their investments in Cyprus. ENI alone has invested over $500 million to date.
Finally, he said that once infrastructure is completed at the Vasilikos terminal, “Cyprus will be able to import some of its own gas from Egypt for domestic use”.
“This”, he explained, “would reduce gas import costs and, consequently, electricity prices in Cyprus”.
