By Bosphorus News Energy Desk
Egypt and Chevron initialed a financial framework on October 20 for the Aphrodite gas field and its planned connection to Egypt. The agreement does not authorize construction or amount to a final investment decision.
Egyptian Petroleum Minister Karim Badawi and Republic of Cyprus Energy Minister Michael Damianos attended the ceremony at the Mediterranean Offshore Conference in Alexandria. The document was initialed by Mohamed El-Bagoury, head of the Egyptian ministry's legal affairs department, and Chevron executive Javier La Rosa.
The project would carry gas to Egypt for processing, domestic use or liquefaction for export. Egypt's ministry said the framework forms part of the financial, commercial and regulatory arrangements for the connection. It did not disclose the terms.
Gas sales and pipeline contracts
In April, the Aphrodite partners and Cyprus Hydrocarbons Company initialed preliminary gas-sale terms with the Egyptian Natural Gas Holding Company (EGAS). NewMed Energy said on July 22 that all parties had signed the resulting memorandum of understanding. A binding supply contract remains outstanding.
The proposed sales agreement would run for up to 15 years or until production ends, whichever comes first, with a possible five-year extension. They specify 700 million standard cubic feet a day during a main delivery phase of at least six years, with prices linked to Brent crude within an agreed floor and ceiling.
Building and operating the transmission system will require separate contracts. NewMed's April filing also described a fiscal regime agreement requiring Egyptian parliamentary approval. The October 20 announcement did not confirm that approval or any final gas sales or pipeline contracts.
On October 8, Badawi said Chevron and Egyptian officials were still working through technical, legal and commercial issues before decisions on long-lead equipment orders and final investment approval.
Israel's share of the reservoir
The Aphrodite reservoir extends into the adjacent Ishai licence area. The Republic of Cyprus and Israel are negotiating compensation for Israeli interests. Technical experts met again on October 14, according to the Cyprus News Agency, but no settlement has been announced.
Those Aphrodite–Ishai negotiations concern rights in the shared reservoir, separate from the Egyptian export arrangements covered by the new framework.
Sources: Egypt's Ministry of Petroleum and Mineral Resources, NewMed Energy regulatory filings, Cyprus News Agency, Bosphorus News review and reporting.