Eni to sign $1.8 billion in contracts for Cyprus’ Kronos gas project

Damietta, Egypt. Italian energy company Eni is scheduled to sign $1.8 billion in construction contracts on Monday for infrastructure to extract gas beneath the seabed at Cyprus’ Kronos field and carry it to Egypt for liquefaction.

Development and export route

Kronos lies within Block 6 in the exclusive economic zone of Cyprus. Eni shares the block’s resource rights with French energy company Total.

The field’s proximity to Egypt’s Zohr field, also operated by Eni, will enable the company to transport Cypriot gas using its existing infrastructure. The gas will reach the Segas liquefied natural gas (LNG) terminal at the Egyptian port of Damietta before being exported to Europe or, if needed, other destinations.

Eni made its final investment decision in July. At that time, the company estimated that Kronos held over three trillion cubic feet of gas.

First sales targeted for 2028

Eni has pledged to accelerate development, with hopes that sales of Cypriot gas could begin as early as 2028.

Cypriot President Nikos Christodoulides expressed the same ambition earlier this year, saying: “the goal is to sell the first Cypriot natural gas to Europe through Egypt in 2028 and we are approving all the relevant agreements”.

Egypt’s government received host-government status for Block 6 last year, clearing the way for liquefaction in Damietta. Cyprus has no domestic liquefaction facilities, while efforts to construct a terminal at Vasiliko have stalled over recent years.

Concerns over revenues and LNG prices

The Cypriot government has faced criticism over the agreement. Energy expert Charles Ellinas said Eni could be seeking additional concessions that would lower the state’s earnings from extracting and selling the gas.

Ellinas also warned that LNG volumes reaching the market could rise by up to 40 per cent over the coming years. With such large supplies becoming available, he said, “it is expected that LNG prices will decrease considerably”.