Cyprus and Egypt sign agreement

Cyprus and Egypt signed an agreement on Wednesday creating the legal framework for energy companies to go ahead with their own commercial talks on the transport of natural gas from Cyprus to Egypt via a sub-sea pipeline.

The agreement was signed in the Ministry of Commerce, in Nicosia, between Cypriot Energy Minister Yiorgos Lakkotrypis and Egyptian Petroleum and Mineral Resources Minister Tarek El Molla.

In statements after a meeting with Cyprus President Nicos Anastasiades at the Presidential Palace a little later Lakkotrypis said they had informed him that they signed “the first of a series of agreements which are necessary in order to establish a secure investment framework for the transport of natural gas from the Cypriot EEZ to Egypt.”

In essence, he explained, “today we signed an agreement which stipulates that the two countries will respect the provisions of any trade agreements that may take place.”

“We hope that this agreement will facilitate and expedite trade agreements, as I have said, creating a secure investment framework for the sale of natural gas from Cyprus to Egypt,” he added.

According to Lakkotrypis the presence of his Egyptian counterpart in Cyprus and the agreement they signed shows the close cooperation between the two countries not just to achieve trade agreements but also to support the operation of the hydrocarbons industry in the Eastern Mediterranean.”

Replying to a question on how soon will the Cypriot gas be transported to Egypt, he said that “in the most recent version of the field development plan that we have the time frame is for first gas to reach Egypt between 2020 and 2022.” However, he added, we are in discussions to see if we can expedite it.

“I am very proud and happy to be here today in Cyprus”, El Molla said on his part. Referring to the agreement he said “we were able to sign our first milestone in a series of events which we will see soon.”

According to the Egyptian minister “we are talking about Cyprus gas coming into Egypt to be sold in the market or for liquefaction to be resold as liquefied natural gas.”

“In all cases it was a step that we were waiting for to happen. We are excited about it. We are looking forward to continue with the next steps which are part of the commercial agreements that will be developed soon,” he pointed out.

He also referred to the support bestowed upon the energy cooperation between the two countries by both Egyptian President Abdel Fattah al-Sisi and President Anastasiades. “There is great enthusiasm to pursue this opportunity as part of the greater cooperation between the two countries,” he said.

“I am looking forward for a speedy process, we intend to start discussions immediately for the road map on the steps forward,” the Egyptian minister noted.

Replying to a question he said the agreement “confirms the desire of Egypt to get the Cyprus gas.”

Asked whether the current situation in the oil & gas market complicates things he said that “this is the energy of the future.”. According to him, gas will replace many conventional cargoes you see trading in the waters. “Having more gas is something good and positive for all countries,” he added.

Replying to a question on whether Cypriot gas is enough he spoke of strategic direction followed by the governments of Cyprus, Greece and Egypt and recalled that Egypt is also developing its own gas reserves.

“This is part of the development of the East Mediterranean gas as a whole and our strategy optimally is to position ourselves as an energy hub in the region,” he concluded.

In a joint statement the two ministers note that the agreement they signed concerns “the transport of natural gas via a direct subsea pipeline from the Exclusive Economic Zone of the Republic of Cyprus to a landing point in the Exclusive Economic Zone or onshore the Arab Republic of Egypt, either for domestic consumption or re-export.”

It is one, they explain, “of a series of legal arrangements which will further support the sale of Cypriot natural gas to buyers in Egypt, provide certainty to investors and complement the relevant commercial discussions which are under way.”

The joint statement further points out that the two governments have also decided “to speedily proceed with discussions on an Intergovernmental Agreement for the pipeline from Cyprus to Egypt, which will be intended to facilitate the realization of the project within the maritime areas of jurisdiction of the two countries.”

“Cooperation in the oil and gas sector between the two countries will further deepen the excellent relations between Cyprus and Egypt to the mutual benefit of the peoples of Cyprus and Egypt, and will also further unlock and promote the potential of the Eastern Mediterranean as a whole,” the statement concludes.