NewMed Energy announced that a term sheet has been initialled for the sale of all recoverable natural gas from Cyprus’s Aphrodite reservoir, in Block 12, offshore Cyprus, to Egypt’s state gas company EGAS, alongside a host government agreement (HGA) covering a new offshore transmission project.
The proposed deal envisages a long-term gas supply agreement of up to 15 years (extendable by 5 years), with peak contracted supply of around 700 million cubic feet per day during the main production phase. Gas pricing will be linked to Brent crude, within agreed floor and ceiling levels, and EGAS will commit to minimum 'take-or-pay' volumes.
Gas would be transported via a new subsea pipeline from the Cyprus-Egypt maritime border to an onshore terminal in Port Said. A dedicated joint venture, Aphrodite Midstream Company (AMC), is to be established to build and operate the infrastructure.
The HGA sets out the regulatory and fiscal framework for the project, with further agreements to be negotiated within 12 months and a final investment decision required thereafter. The Egyptian government has pledged support for the development.
Both agreements remain non-binding and subject to final approvals and signatures by all parties and the governments of Egypt and Cyprus, which are expected in the coming weeks.
Source: NewMed Energy
