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Chevron and its partners, Shell and NewMed Energy, have put forward a new $4 billion plan to develop the Aphrodite gas field off Cyprus, according to a report by Kathimerini's Yiannis Ioannou. The proposal comes after Cyprus warned it might revoke the license for the project due to delays.
The updated plan aims to address Cyprus' concerns but comes with a significantly higher price tag compared to previous proposals. Chevron’s latest plan includes building a floating production unit (FPU) directly over the gas field, which would extract up to 800 million cubic feet of gas per day through four wells. The gas would then be piped to Shell’s facilities in Egypt for processing.
The new $4 billion cost is higher than earlier estimates. In 2019, Noble Energy, which was later acquired by Chevron, estimated development costs at $3.6 billion. Chevron's proposals earlier this year were even lower, ranging from $2.6 billion to under $3.2 billion. However, Cyprus insisted on a plan more in line with the original 2019 proposal, which has led to the higher cost.
Cyprus’ government has long pushed for a floating production facility to be built over the gas field. Chevron’s updated proposal meets this demand but compromises on the number of wells, proposing four instead of the five originally suggested by Noble Energy in 2019.
Chevron’s move to present a more costly proposal that aligns with Cyprus’ original demands seems to be a strategic step. By doing so, the company aims to avoid potential legal battles with Cyprus over the project. The updated plan highlights Chevron's efforts to meet the government's expectations, and possibly to strengthen its position in any future negotiations or disputes.
The plan is still pending approval from Cyprus, and the coming months will be crucial in determining if the project moves forward under these terms. As it stands, both sides need to balance costs, technical requirements, and political considerations to make the Aphrodite gas field a viable project.
