Cyprus Set to Gain from Fast-Tracked Gas Development in Block 6, Says Professor

Natural gas extraction from Block 6 of Cyprus’ Exclusive Economic Zone (EEZ) could begin within two to two and a half years, according to Constantinos Hadjistassou, Professor at the School of Sciences and Engineering, Department of Engineering at the University of Nicosia.

In an interview with the Cyprus News Agency (CNA), Hadjistassou emphasized that this development would bring significant benefits to Cyprus. He described the agreement concerning Block 6 as the most important of the two agreements signed in Cairo.

Block 6’s Potential and Initial Development

According to Hadjistassou, Block 6 comprises three gas fields—“Cronos”, “Zeus”, and “Calypso”, with a total estimated capacity of 6.5 trillion cubic feet (tcf).

He noted that the initial development is likely to begin with “Cronos”, though other discoveries in the block appear to have greater potential. However, further appraisal drilling will be required to confirm the exact reserves.

“The development agreement for Block 6 is more significant because it is at a more advanced stage due to existing infrastructure,” he explained.

He further noted that the fields in Block 6 can be developed faster and at a lower cost than the “Aphrodite” gas field. The consortium led by ENI plans to connect Block 6 to Egypt’s Zohr field, which is about 80 km away, using existing subsea pipelines to transport the gas to the Damietta terminal in Egypt.

“The key requirement for Block 6 will be the creation of a platform to extract and clean the natural gas, perform basic processing, and then compress and transport it via pipeline to connect with Zohr’s subsea infrastructure,” he said.

Lower Costs Compared to Aphrodite Field

Hadjistassou highlighted that the cost of developing Block 6 would be lower than that of the Aphrodite gas field (Block 12), which requires entirely new infrastructure.

“The most expensive component of the ‘Aphrodite’ project is the pipeline, which must span approximately 320 km to reach Egypt’s Idku terminal,” he explained.

While Block 12 has confirmed reserves after three drillings, its available gas quantities are smaller than those found in Block 6. Additionally, an agreement between Cyprus and Israel over the Ishai field remains pending, despite the approval of its development plan.

“In any case, the development costs of Block 12 will be higher than Block 6 due to greater infrastructure requirements,” he noted.

Next Steps for Block 6

The next crucial step in the development of Block 6 is the submission of a development plan by ENI. According to Hadjistassou, this is expected to occur in the summer, aligning with Egypt’s growing demand for natural gas for both domestic use and exports.

He pointed out that Egypt’s Zohr field is rapidly depleting, which creates an opportunity for Cyprus.

“This creates an opportunity for Cyprus, especially since the consortia operating in both EEZs can easily utilize existing infrastructure to commercialize this gas,” he stated.

The upcoming appraisal drilling will determine more precise gas quantities, followed by a feasibility study to evaluate the required equipment and estimate development costs. Once submitted to the Ministry of Energy, both the government and the company will review it for approval.

After receiving the green light from the Ministry, the company will make a final investment decision to secure the necessary financial resources.

Industry Collaboration Crucial for Success

Discussing gas sale prices, Hadjistassou emphasized that collaboration between companies is essential to reduce development costs.

“The key issue is that Cyprus’ domestic demand is relatively small, making exports necessary,” he said.

He also pointed out that these gas discoveries are located in ultra-deep waters, requiring significant investments, which increases costs.

Despite this, he predicted strong demand for natural gas in Asia, particularly in India and China, as well as in Europe.

He further noted that Europe has increased LNG imports from the Middle East and the U.S. to replace Russian gas.

“Cyprus’ advantage is that it is a European country,” he said.

He also mentioned that Egypt is interested in exporting part of this gas to Europe, but the main challenge would be ensuring the gas is competitively priced to attract buyers.

“LNG is three to four times more expensive than pipeline gas,” he noted.

Hadjistassou stressed the importance of a coordinated development plan for all of Cyprus’ EEZ gas fields, as this could reduce costs.

“For this to happen, companies will need state support to create a framework for collaboration,” he said.

“This could include incentives such as tax breaks or other measures to encourage joint infrastructure development,” he added.

Cyprus Poised to Benefit as a Gas-Producing Nation

Hadjistassou outlined the multiple benefits Cyprus would enjoy as it transitions into a gas-producing country.

“Egypt provides Cyprus with a vehicle to commercialize its gas discoveries and export to Europe and Asia, ensuring revenues,” he stated.

Timely gas development would also ensure that Cyprus is not left behind in the global energy transition, which could otherwise marginalize hydrocarbons.

Additionally, Cyprus’ geopolitical position would be strengthened, further solidifying its relations with Egypt.

“This will also send a strong message to Turkey that the Republic of Cyprus is a sovereign state, fully capable of utilizing its natural resources for the benefit of all Cypriots, including Turkish Cypriots,” he remarked.

From a commercial standpoint, he highlighted that companies would recover their investments, noting that ENI alone has invested over $500 million so far.

Finally, once the Vasilikos terminal infrastructure is completed, Cyprus will be able to import some of its own gas from Egypt for domestic consumption.

“This,” he explained, “would reduce gas import costs and, consequently, electricity prices in Cyprus.” 

By fLEXI tEAM