Italy's Eni is advancing plans for gas developments across the eastern Mediterranean and North Africa, as it seeks to fast-track supply into Europe through Egypt’s existing LNG infrastructure.
It also intends to make an investment decision on the Cronos field in Cyprus soon.
Eni and France’s TotalEnergies discovered the Cronos gasfield, which is estimated to hold more than 3 trillion cubic feet of gas, in 2022.
“We expect, of course, some further appraisal activity this year and next year. But for phase one of the project, we are pretty ready,” Guido Brusco, chief operating officer of Global Natural Resources at Eni told The National in an interview in Abu Dhabi during the World Future Energy Summit.
A final investment decision on the project could happen in “Q1 or very early Q2, but pretty soon", he added.
Cronos would be developed in phases and tied back via subsea infrastructure to Egypt, avoiding the need for new processing or liquefaction apparatus in Cyprus, he said.
Eni and TotalEnergies would process and liquefy gas at Egypt’s existing LNG plants, with cargoes destined eventually for Europe.
Cyprus has been aiming to fast-track its East Mediterranean gas discoveries, including the Aphrodite, Zeus and Pegasus fields, as oil majors race to develop and supply natural gas to Europe.
The push to monetise Cyprus’s offshore gas comes as the Eastern Mediterranean seeks to replicate the export successes of neighbouring producers, including Israel’s Leviathan field and Egypt’s Zohr, which was found by Eni in 2015.
The urgency is reinforced by Europe’s efforts to secure alternative gas supplies as it reduces reliance on politically contentious Russian imports.
“Without leveraging on Egyptian facilities, we should have built either a stand-alone floating LNG or an onshore LNG in Cyprus, which would hardly hit the economic return for a project of this nature,” Mr Brusco said.
Eni is also stepping up exploration and development activity across North Africa, with plans to drill an offshore exploration well in Libya’s Sirte Basin.
It also plans to drill onshore wells near existing facilities in the country’s south-west. The offshore well, which is associated with a greenfield development, is considered higher risk but potentially higher impact, while the onshore campaign is designed to tie any discoveries directly into existing infrastructure.
In Egypt, Eni is continuing gas exploration while seeking to maximise output from mature assets, including in the Western Desert, where production records have been set in recent years, Mr Brusco said.
“We still believe that there is a potential in Egypt, and we continue exploration on gas,” he said.
Eni is also exploring for more potential within Zohr, which is estimated to hold 30 trillion cubic feet of gas. He said there was potential where they hadn’t drilled before.
Cairo has in recent weeks signed preliminary agreements with Lebanon, Syria, Jordan, and Cyprus to supply gas in the future, despite facing shortages at home. Egypt signed a $35 billion agreement with Israel last month to import gas from Leviathan to meet its domestic gas deficit.
Mr Brusco said Egypt’s ambitions to return to being a net gas exporter will depend on both upstream investment and changes to its energy mix. Egypt’s plans for more renewables including large-scale wind and solar plants could free up gas currently used for power generation.
“Every 10 gigawatts of renewables equates to almost 0.7 to 0.8 billion cubic feet of gas. So if the country will undertake this journey, as it is doing now, the growth of the renewable capacity may free up more gas,” he said.
Last week, Eni signed a new offshore exploration agreement in Lebanon alongside TotalEnergies and QatarEnergy, with seismic work expected to determine drilling plans. Mr Brusco cautioned that the activity remains at an early stage, with prospects yet to be defined.
