Egypt and Cyprus have finalized a set of landmark commercial agreements that pave the way for development of the Cronos gas field in Cyprus’s Block 6, marking a decisive step toward the project’s Final Investment Decision. The deals allow natural gas from Cyprus to be processed and later exported through Egypt’s liquefied natural gas facilities, reinforcing Egypt’s role as the Eastern Mediterranean’s regional gas hub, according to the Middle East Economic Survey.
The agreements include a Handling, Transportation and Processing Agreement between Eni, which holds a 50 percent stake and operates the field, TotalEnergies with 50 percent, the Egyptian Natural Gas Holding Company, IEOC, and Petrobel. Additional contracts include a tolling agreement between the operators and the Damietta LNG export facility, and a tariff agreement between the Block 6 partners and Egypt’s Ministry of Petroleum and Mineral Resources.
The agreements establish an innovative route for Cronos gas through Zohr’s offshore infrastructure, using one of two 30-inch Zohr pipelines exclusively dedicated to Cronos gas. The gas will be treated at Zohr’s onshore facilities before being routed via a new pipeline, yet to be constructed, directly to the 5 million tonnes-per-year Damietta LNG plant operated by Eni. This route allows the gas to bypass Egypt’s national grid entirely.
According to a source from EGAS, the Cronos partners will pay a tolling fee slightly above or below $1 per million British thermal units, depending on quantities, and a tariff of less than $0.50 per million Btu for Egypt’s infrastructure use and regulatory facilitation. The tolling contract governs liquefaction operations at Damietta, while the tariff agreement defines Egypt’s share from hosting and supporting the project.
Eni’s push to accelerate the project stems partly from declining output at the Zohr field, currently at 1.3 billion cubic feet per day, around 59 percent below its 3.2 billion cubic feet per day capacity. Eni is the main operator of Zohr, Egypt’s largest natural gas field and one of the biggest ever found in the Mediterranean.
Discovered in 2022 and estimated to hold around 2.5 trillion cubic feet of recoverable gas, the Cronos field will help offset that decline and strengthen regional supply security. Once operational, the project will facilitate direct LNG exports to Europe, aligning with European Union diversification goals.
Source: egyptoil-gas.com