U.S. Supports Chevron in Dispute with Cyprus over Linking Aphrodite Gas to Egypt

Gas industry sources reported on Friday that Washington has entered the dispute between Cyprus and global companies led by Chevron regarding the development of a giant gas field off the southern coast, to support the American company's plan to link it to Egypt. The consortium led by Chevron proposed connecting the Aphrodite gas field to an undersea pipeline and existing infrastructure in Egypt, where the gas could be sold in the local market or liquefied and shipped to Europe, which has largely been cut off from Russian supplies. Cypriot Energy Minister George Papanastasiou stated that the government rejected the latest plan, which excluded a previous proposal to build a floating gas processing facility at the field located 160 kilometers southeast of Cyprus. Papanastasiou told Reuters, "The amendment met with rejection. The Republic of Cyprus expected the consortium to respect what both parties agreed upon in 2019." Earlier this week, Israeli partner Neomede in the Aphrodite field announced that the partners entered a new round of talks with the Cypriot government. An American source indicated that the United States supports Chevron's plans, believing they will help connect gas to the market more quickly and will result in lower carbon emissions as they do not require extensive infrastructure. The source elaborated, "Connecting Aphrodite to Egypt helps them during peak local consumption in the summer, enhances stability, reduces tensions in the region, and allows for exports to Europe." The source noted that the Biden administration "distinguishes between costly and unnecessary infrastructure projects and the less strenuous and essential connections as economies transition to cleaner forms of energy." The Aphrodite field, discovered over a decade ago, contains about 124 billion cubic meters of gas. Chevron is a partner in the field along with Neomede and Shell. The development of the field supports the Eastern Mediterranean gas basin, which has attracted substantial investments in recent years, especially following Russia's invasion of Ukraine, as Europe seeks alternatives to Russian fossil fuels. Two industry sources noted that Nicosia opposed Chevron's plans to drill three production wells instead of five and to avoid the construction of a floating production unit above the field. A Chevron spokesperson stated that the consortium is working on the development of the Aphrodite project. They added, "We submitted a revised development plan to the Cypriot government that we hope will lead to the development of the Aphrodite field and the connection of gas to Egyptian and global markets via existing liquefied natural gas facilities on Egypt's northern coast." Chevron stated, "We believe it is important for Aphrodite to be developed quickly to serve the interests of Cyprus, the Eastern Mediterranean region, and European and other international markets."