$1.8 billion in contracts signed for Kronos development — Cyprus Mail

The Cypriot government has approved the development of the Kronos gas field, for which the main contracts worth up to $1.8 billion were signed on October 26. They move the project into the construction phase, with Eni and TotalEnergies expecting first gas in mid-2028, Cyprus Mail reports.

The publication notes that the start of production and exports will bring Cyprus closer to becoming a natural gas producer. At the same time, state revenues will depend on the agreed commercial and fiscal terms. According to the article’s author, receipts may begin after 2031.

Terms and risk allocation

According to industry sources and the specialist publication MEES, the Cypriot government approved the Kronos development following difficult negotiations over commercial terms and risk allocation. They said that certain concerns of the authorities regarding this allocation were not fully addressed, while the final terms raised reservations about Cyprus’s economic benefits and obligations.

Cyprus Mail emphasizes that without the disclosure of key contract terms, it is impossible to independently assess the risks assumed by the country and the expected range of its revenues.

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Egyptian infrastructure and LNG

The project will rely on the existing infrastructure of Egypt’s Zohr field and the LNG terminal in Damietta. Production at Zohr has fallen below 1 billion cubic feet per day, while its processing facilities have a capacity of 3.2 billion cubic feet per day.

Approximately 0.4 billion cubic feet of gas per day is planned to be supplied to Damietta, enabling the production of about 2.8 million tonnes of LNG per year. Eni and TotalEnergies will each sell 50% of these volumes. Cyprus, in turn, will receive revenues from the field’s development in accordance with the agreement’s commercial and fiscal terms.

Transporting, processing and liquefying the gas requires significant costs, which may reduce Cyprus’s potential economic benefits. At the same time, using existing Egyptian facilities reduces initial investment and speeds up the field’s development.