Egypt and Cyprus have signed a major agreement to reexport and commercialize Cypriot natural gas, marking a significant step in Egypt’s plan to regain its role as a regional energy exporter. The deal comes as Egypt faces a sharp drop in its own gas production, making the partnership crucial for its energy future.
Under the agreement, gas from Cyprus’s offshore fields—Cronos, near the southwest coast, and Aphrodite, to the southeast—will be sent to Egypt’s liquefaction plants at Idku and Damietta. There, it will be turned into liquefied natural gas (LNG) for export to global markets. Egyptian President Abdel-Fattah El-Sisi and Cypriot President Nikos Christodoulides oversaw the signing at a gas conference in Cairo.
Cyprus highlighted that the deal goes beyond gas development, calling it a step toward stronger energy ties with Egypt. For Egypt, the agreement is a lifeline. The country’s gas production has fallen sharply in recent years due to rising electricity demand and a lack of investment caused by a foreign currency crisis. In June 2024, Egypt’s gas output hit its lowest level since 2017, forcing the government to import more LNG than it has in nearly six years.
The Aphrodite gas field, discovered in 2011, holds an estimated 4.4 trillion cubic feet of natural gas but has yet to be developed. Chevron Cyprus Ltd., the field’s operator, owns a 35% stake, while Shell’s BG Cyprus Limited and NewMed Energy hold 35% and 30%, respectively. Chevron praised the deal, with Frank Cassulo, a company vice president, saying it lays the groundwork for future commercial plans.
Egypt’s economic struggles, including inflation and a weak currency, have made it harder to revive its energy sector. However, a $57 billion bailout from the United Arab Emirates, the International Monetary Fund (IMF), and others has provided some relief, helping the government stabilize its finances.
Officials hope the deal with Cyprus, along with other regional partnerships, will help Egypt resume gas exports by the end of 2027. By using Cyprus’s gas and Egypt’s LNG facilities, the two countries aim to strengthen energy security and boost economic ties in the Eastern Mediterranean.
This partnership is part of Egypt’s broader strategy to become a regional energy hub. In recent years, Egypt has signed similar deals with Israel and Greece, aiming to integrate their gas resources into its export network. The goal is to reduce Egypt’s reliance on gas imports and return to being a net exporter.
The Egypt-Cyprus deal could also help stabilize the Eastern Mediterranean, a region often marked by geopolitical tensions. By working together, the two countries are paving the way for greater cooperation and energy security in the area.