Nicosia: Cyprus and Egypt signed a deal on Wednesday paving the way for detailed negotiations on a submarine pipeline to export natural gas from the Mediterranean island to its energy-starved neighbour.
Cyprus has been eager to secure alternative ways to exploit its offshore reserves after proven finds so far were insufficient to make a planned liquefied natural gas plant on the island’s south coast financially viable.
Cyprus Energy Minister Georgios Lakkotrypis, and Egypt’s Minister of Petroleum and Mineral Resources Tarek El Molla signed the agreement clearing the way for further negotiations on construction of the pipeline from offshore fields in Cyprus’s exclusive economic zone to Egypt, where the gas will be used either for domestic consumption or re-export.
“It is one of a series of legal arrangements which will further support the sale of Cypriot natural gas to buyers in Egypt, provide certainty to investors and complement the relevant commercial discussions which are underway,” the statement said.
The two governments will now “speedily proceed” with discussions on an intergovernmental agreement for the pipeline.
The Egyptian minister said: “We signed our first milestone agreement in a series of events that we will be seeing soon.
“I am looking forward to a speedy process from now on and we will start immediately discussions regarding putting the key milestones and road map for the coming steps.”
Lakkotrypis said the aim was to get the pipeline operational from 2020-2022.
“We hope this agreement will help speed up commercial agreements and create an investment framework for the sale of natural gas from Cyprus to Egypt,” he said.
He said cooperation between Cyprus and Egypt would help support an “operational framework for the hydrocarbon industry in the east Mediterranean.”
Since its first offshore gas find in 2011, Cyprus has held a series of exploration licensing rounds hoping to discover new reserves.
In the latest round, US giant ExxonMobil with Qatar Petroleum are among eight major energy players bidding to explore offshore for Cyprus oil and gas.