The intergovernmental agreement signed between Egypt and Cyprus for Aphrodite gas field resulted to great interest from International oil companies, down-streamers and financial institutions, Egypt’s Minister of Petroleum and Mineral Resources Tarek El-Molla said.
In an interview, the Egyptian minister said that after the important umbrella agreement for building a gas pipeline between the two countries, discussions are now taking place to accelerate the process after completing the constitutional and legal procedures in each country, which should then be followed by a commercial agreement for the project.
The minister also stressed the multiple benefits for Cyprus from cooperating with Egypt in the framework of the recently established Eastern Mediterranean Gas Forum (EMGF). He said Cyprus could benefit from EMGF by quick monetisation of its current reserves, potential increase in future discoveries and integration with other parties in the value chain, opening new opportunities of cooperation and stable technical and commercial cooperation.
Cyprus, Greece, Egypt, Italy, Israel, Jordan and Palestine participate in the East Mediterranean Gas Forum, which is based in Egypt and its objective is the optimal joint exploitation of hydrocarbon resources in the Eastern Mediterranean.
El-Molla also referred to the political benefits from such a cooperation, saying that the discussion on gas matters could be a start for further resolutions of other conflicts and sent the message to the world that the region is a “safe and secure environment for investment”.
He also expressed the view that Egypt is “the most ready option with the least risk” for gas supply of Europe, due to the good political relations with everyone and the new business environment in Egypt.
Pointing out that Egypt is the best option both economically and politically for all East Med Gas to access potential markets, El-Molla said that the existing LNG facilities and infrastructure give Egypt a competitive edge, making it the most economical option. As for the option of East Med pipeline between Cyprus, Greece, Israel and Italy, he said that the feasibility study for the project would take up to two years, “which in itself is a luxury the region can’t afford any more”.
The minister also described the new business environment in Egypt for oil and gas sector, after the discovery and development of the Zohr field, which as he said showcases “how business is done nowadays in Egypt”.
He said the Zohr field was the pinnacle of many achievements in the Egyptian petroleum sector. Its significance was not only in its size but it represents many breakthroughs in the Egyptian business model and how challenges can be overcome.
“This is a showcase of how business is done nowadays in Egypt. We take it seriously,” he said.
Turning to a regional hub was a main pillar of Egypt’s modernisation project. “We perceive Europe as our primary targeted market. We have taken many steps towards this goal. We signed an MoU with the EU on strategic partnership in energy in April 2018; including EU’s support to Egypt to turn into a regional energy hub,” El-Molla said.
On the EGMF, he said the forum would build a structured dialogue between all parties across the Gas value chain; producers, consumers, transit countries and industry parties which would enable integration and shared use of existing and future infrastructure.
“Cyprus will benefit from EMGF in many ways; by quick monetisation of its current reserves, potential increase in future discoveries and integration with other parties in the value chain opening new opportunities of cooperation and stable technical and commercial cooperation,” he said.
He added that the governmental agreement signed between Egypt and Cyprus on the Aphrodite field in Cyprus’ block 12.
“It highly emphasises the two governments’ support and commitment of this cross-border project. As a result, we have witnessed great interest from the IOCs, down-streamers and financial institutions. Discussions are now taking place to accelerate the process after completing the constitutional and legal procedures at each country. This shall then be followed by a commercial agreement for the project.”
Asked about the East Med gas pipeline between Cyprus, Greece, Israel and Italy, the Egyptian minister said there were many options.
“Nevertheless, we believe that Egypt is the best option both economically and politically,” he said. “The existing LNG facilities and infrastructure give Egypt a competitive edge, since each existing facility would now cost around US$10bn to implement, making it the most economic option,” he added.
“The feasibility study for the East Med gas pipeline project will take up to two years, which in itself is a luxury the region can’t afford anymore.”