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Cyprus is closer than ever to exporting its own natural gas, but the financial benefits for the country could be much smaller than many hope, energy expert Charles Ellinas has warned.
Speaking to the Cyprus News Agency, Ellinas described Monday’s signing of contracts for the Kronos gas field as historic. The agreements cover infrastructure needed to develop the offshore field and move its gas toward Egypt.
Ellinas argued that Cyprus had made too many concessions to Eni, particularly over charges for using infrastructure connected to Egypt’s Zohr field.
But he said the milestone also raises an important question for Cypriots: How much will the country actually gain?
“If we ask the question, what is the benefit for the Cypriot side? Unfortunately, the benefits for Cyprus are very low,” Ellinas said.
The contracts, signed by Italian energy company Eni at the Presidential Palace, are worth up to $1.8 billion. They form part of plans to develop Kronos in Block 6 of Cyprus’ exclusive economic zone.
Under the project, the gas is expected to be sent to Egypt, processed using existing facilities linked to the Zohr field, and then liquefied at the Damietta terminal before being sold mainly to European markets.
Where does Cyprus benefit?
Ellinas argued that Cyprus had made too many concessions to Eni, particularly over charges for using infrastructure connected to Egypt’s Zohr field.
He said Cyprus’ financial interest ends at the entrance to the Damietta terminal before the gas is turned into liquefied natural gas, or LNG, and sold.
That matters, he argued, because the LNG sale is where much of the added profit is made. According to Ellinas, Cyprus does not share in that part of the business.
He also questioned how much strategic influence Cyprus would have over the final destination of the gas, saying the LNG would go where Eni decided.
A milestone, but a modest share of Europe’s needs
Ellinas said the field’s output could amount to around 4 billion cubic meters a year. That would represent a little more than 1% of Europe’s annual gas consumption, which he put at roughly 340 billion cubic meters.
The project is still significant for Cyprus: it is the country’s first offshore gas development, with production targeted for the first half of 2028.
But Ellinas’ comments underline a question that will remain important as the project moves forward: How much revenue will reach Cyprus once the gas starts flowing?
