In Chevron proposal, Cyprus suggests sharing gas production unit

Energy Minister George Papanastasiou revealed on Tuesday what Cyprus’ proposal to break the deadlock with Chevron’s negotiations on the Aphrodite gas field entails.

In an interview with AlphaNews, he explained the sticking point between both sides was the inclusion of a Floating Production Unit (FPU).

Chevron has proposed the FPU is scrapped from the plans as the company wants to connect the field to liquefaction infrastructure in Egypt via a subsea pipeline. From there it would be transported to the mainland eventually for domestic consumption or for export as LNG.

The energy giant would save approximately €1 billion by not building an FPU.

Cyprus in the meantime, insists the FPU stays because removing it would “strip us of the flexibility that the FPU would offer the Republic of Cyprus”, Papanastasiou said.

After intensive talks, the government has countered that the FPU stays but is instead shared with other gas firms with interests in the Republic’s energy fields.

This would create a synergy between the gas companies, and the FPU could be used by all – thus also cutting costs for Chevron.

Though he did not divulge more, Papanastasiou said this was the direction the government was moving towards and now Chevron has 15 days since Cyprus submitted its proposal on Sunday, to respond.

“There are solutions available, provided there is good will from both sides.”

Earlier this week, Chevron’s director of exploration and production for the Middle East, Africa and South America, Clay Neff, for a slew of meetings with both Papanastasiou and President Nikos Christodoulides as part of efforts to break the deadlock over the Aphrodite field.

Chevron are the operators and a 35 per cent partner in the Aphrodite field, along with Shell (35 per cent) and Israeli firm NewMed Energy (20 per cent).