By Bosphorus News Energy Desk
The Republic of Cyprus has asked Chevron and its partners to reconsider a proposed increase in the cost of transporting Aphrodite gas through Egyptian waters, according to a report by Middle East Economic Survey (MEES) on October 16. The proposed tariff would rise from about $1 to $3 per million British thermal units (MMBtu).
The proposal concerns the Egyptian section of the subsea pipeline planned to connect Aphrodite with Egypt's gas network. Chevron has not disclosed a final tariff, and negotiations continue.
A $500m Difference at Full Output
According to Politis, citing MEES, the Egyptian pipeline section would be developed by Aphrodite Midstream Company, involving the field partners and an Egyptian government-designated entity. The Republic of Cyprus would hold no direct stake.
MEES estimates that raising the tariff by $2 per MMBtu would add roughly $500 million a year in transport costs if Aphrodite reaches planned peak sales of 700 million cubic feet a day. That is a full-output estimate, not a bill to the Cypriot government. Higher transport charges could reduce revenue under the field's production-sharing arrangements.
Energy analyst Charles Ellinas told the Cyprus Mail on October 19 that the proposed tariff could leave Cyprus with little revenue from the field. The government is seeking a more competitive rate.
NewMed Targets a 2028 Investment Decision
Chevron and its partners have begun front-end engineering design for a floating production facility and an export pipeline to Egypt. NewMed Energy puts the cost of that work at about $106 million and lists 2028 for a final investment decision (FID), with first gas expected in 2031.
The Cypriot government has set out an earlier timetable. Energy Minister Michalis Damianos said in August that he expected an investment decision in summer 2027. Neither target is a completed investment approval.
Egypt Sales and Israel Compensation Still Under Negotiation
The partners plan to sell Aphrodite gas to the Egyptian Natural Gas Holding Company (EGAS). A memorandum covers the proposed sales, but binding commercial and pipeline agreements still need to be completed. Egypt's petroleum ministry said on October 8 that it was working with Chevron to complete the agreements needed before major equipment orders and a final investment decision.
Cyprus is also negotiating compensation with Israel for the part of the Aphrodite reservoir extending into the Ishai licence across their maritime boundary. The separate gas-sale framework with Egypt does not settle the transit tariff.
Sources: Middle East Economic Survey, Politis, Cyprus Mail, NewMed Energy, Egyptian State Information Service, Bosphorus News review and reporting.