Eni and TotalEnergies accelerate Cyprus gas for 2028 Europe supply
Cyptus signed a $1.8 billion deal with Eni and TotalEnergies to develop the Kronos gas field, targeting 2028 production and European exports via Egypt.
Cyprus has signed a $1.8 billion deal with energy giants Eni and TotalEnergies to develop its first natural gas field. The Kronos project aims to begin production in the first half of 2028, with exports to Europe routed through Egypt.
Eni and TotalEnergies decided in July to accelerate the project, setting the 2028 target. The deal clears the way for a final investment decision and contract signing that same month. This development is a strategic move to bring new gas volumes to European markets.
Strategic Partnerships and Infrastructure
The project's economics rely heavily on leveraging existing Egyptian infrastructure. Gas will be transported via new subsea pipelines from the Kronos field, located in Block 6 of Cyprus's exclusive economic zone, to connect with the vast Zohr field network. From there, it will flow to Egypt's Damietta LNG terminal for liquefaction and shipment to Europe. This use of nearby facilities significantly reduces capital costs.
A consortium of international firms has been contracted for the complex subsea work. The engineering, procurement, construction, and installation (EPCI) contract involves multiple specialized companies.
President Nikos Christodoulides called the development a decisive step and a strong vote of confidence in Cyprus's energy prospects. Energy Minister Michael Damianos stated the importance of Kronos for Cyprus far exceeds the estimated quantities of natural gas it possesses. The field is believed to hold more than three trillion cubic feet of gas.
Eni's chief operating officer Guido Brusco described the development as a historic milestone. "It is our first development project in Cyprus and confirms our commitment to being a long-term partner in the country's energy future," he said. He also noted the project would unlock new quantities of European natural gas for European markets, contributing to secure and affordable energy during a critical global transition.
The project advances amid other regional developments. US company Chevron is in talks to advance the separate Aphrodite gas project off Cyprus. Also, Shell has agreed to sell its stake in Aphrodite to Hungarian energy group MOL, with completion expected in early 2027.
Financial and Market Implications
The massive investment coincides with strong financial health for the lead operator. Eni's third-quarter results showed robust performance, beating analyst estimates. Adjusted net income more than doubled year-over-year to €2.8 billion. The company raised its full-year guidance for underlying cash flow from operations to €16.5 billion from €15 billion, citing strong operational performance and higher commodity prices.
Eni also announced an extraordinary dividend of approximately €1.3 billion and increased its share buyback program. The company's oil and gas production rose 7% year-over-year to 1.83 million barrels of oil equivalent per day in the quarter.
Market analysts note that the amount of LNG entering the global market may increase by up to 40% in the coming years, which could cause LNG prices to decrease considerably. The Kronos project, coming online in 2028, will contribute to this potential supply wave.
The Cypriot government has faced some criticism over the terms of such deals. Energy expert Charles Ellinas suggested Eni may be pressing for more concessions to reduce state revenue from gas extraction and sale.
The signing ceremony for the EPCI contract will follow immediately after a meeting at the Presidential Palace at noon.
