Egypt agrees to buy full output from Cyprus’ Aphrodite gas field

(Bloomberg) – Egypt agreed to buy the entire output of the Aphrodite gas deposit in Cyprus when the field starts up in about six years, as the North African country looks to ensure long-term supply to meet growing demand.

Egyptian Natural Gas Holding Co. signed the preliminary deal with the companies that operate the Aphrodite project and Cyprus’ state-run oil and gas firm, Newmed Energy LP, which owns a stake in the project, said in a statement. The Aphrodite partners and Egypt also agreed a framework to develop a gas transmission system off the coast of the African country, according to the statement.

While production from the Aphrodite field is only expected to start in 2031, according to Newmed, Egypt will benefit from any additional supply after it turned into a net gas importer following a surge in demand and declining output from its local fields. The country’s purchases of liquefied natural gas have increased while it continues to be dependent on pipeline shipments from Israel.

Supplies from Israel recently resumed after a monthlong halt as fields that were temporarily shut because of the war in the Middle East restarted. Previous such closures had prompted Egypt to secure more LNG from world markets.

Cairo and the Aphrodite partners will incorporate a company called Aphrodite Midstream Co. in Egypt to implement the gas transmission system off the country’s coast, according to Thursday’s statement. Newmed owns a 30% stake in the Aphrodite license, while Chevron Corp. and Shell Plc hold 35% each, according to Newmed’s website.