Israel’s Newmed Energy LP announced on Wednesday that the final decisions regarding the development of the ‘Aphrodite’ gas field will be made on November 20.
The company also said that their partners – Chevron and Shell – in the consortium will consider their course of action on the matter.
In a statement to the Tel Aviv Stock Exchange, Newmed Energy reported that the field’s operator, Chevron, received a letter from the Energy Minister George Papanastasiou on November 5, informing them of an extension granted to the consortium partners to comply with the development plan.
This extension will push the date for the government’s final binding decision on the partners’ request to November 20, while the compliance date will be postponed for around two months, to January 7, 2024, to allow the partners to confirm their consent to the development plan and sign an amended agreement.
Along with US company Chevron, Newmed Energy had submitted for approval an updated development plan for ‘Aphrodite’ field to the government, which provided for the connection of the field to liquefaction infrastructure in Egypt via a subsea pipeline.
The updated plan was rejected by the Cypriot government at the end of August, with the contract providing for 30 days of negotiations to resolve the dispute. The negotiation period was extended for another 30 days with a deadline on November 5, which was pushed back once again on Wednesday.
Papanastasiou on Tuesday explained the sticking point between the government and the companies involved in the ‘Aphrodite’ gas field 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.
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).