Aphrodite rising as Chevron, Shell, NewMed and Cyprus give the go-ahead for tweaked gas development plan

Chevron Cyprus, a subsidiary of the U.S.-headquartered oil major Chevron, and its partners, BG Cyprus (Shell) and NewMed Energy, have given their blessing, together with the government of Cyprus, for an updated development plan of an offshore gas field reservoir in Block 12 located in the Eastern Basin of the Mediterranean Sea.

The approval of the modifications made to the Aphrodite gas field development and production plan (DPP) and the production sharing contract (PSC) milestones aims to advance technical and engineering work related to the front-end engineering and design (FEED) toward a final investment decision (FID) for the project.

George Papanastasiou, Cyprus’ Minister of Energy, Commerce and Industry, commented: “The Republic of Cyprus has approved today the development and production plan of the Aphrodite field, following the official submission by the Aphrodite consortium, Chevron Cyprus Limited, BG Cyprus Limited (Shell) and NewMed Energy LP.

“We look forward to the expeditious development of the field via Egypt’s facilities, a tangible step towards establishing the role that Cyprus envisions in the energy sector of the region, for the benefit of the country and its people. We will be monitoring closely the fulfillment of the obligations of Chevron and its partners, on the basis of the approved development and production plan and the production sharing contract.”

The Ministry of Energy, Commerce, and Industry and joint venture partners – Chevron, Shell, and NewMed – have confirmed the approval of the modifications proposed to the development and production plan for Aphrodite to move forward with the project’s development. The green-lighted DPP entails a floating production unit (FPU), known as a gas processing facility, in the Cypriot Exclusive Economic Zone (EEZ) and a pipeline for gas export to Egypt.

Frank Cassulo, Vice President, Chevron International Exploration & Production, highlighted: “We welcome this major development and our productive engagements with the Cypriot government. Chevron values its partnership with the Republic of Cyprus and we believe it is important that Aphrodite is developed for the benefit of the Republic of Cyprus, and the Eastern Mediterranean region. This is also aligned with our strategy to deliver affordable, reliable, and ever-cleaner energy.”

Originally made at the A-1 well in September 2011, the Aphrodite discovery was appraised with the A-2 appraisal well in 2013, confirming approximately 98 billion cubic meters of gas (bcm) of contingent resources with a potential for an additional 26 bcm of prospective resources. Cyprus approved a production license in Block 12 for 25 years in November 2019.

Situated 160 km south of Limassol and 30 km northwest of Israel’s Leviathan field, the Aphrodite field reservoir’s sea depth reaches 1,700 meters. After working on the final optimization details for the field’s development concept in July 2022, through possible synergies with other facilities, Chevron confirmed plans to move forward with the field development a few months later, planning to invest about $192 million to drill a new well and to cover development costs for the project.

The U.S. oil major submitted an updated development plan for the project in May 2023, which the country’s government shot down in August 2023. Afterward, the operator and its partners in the Aphrodite reservoir got an invitation to continue the discussions on the matter in early September 2023.

As a result, Chevron handed over another revamped Aphrodite field development plan for approval to the government of Cyprus on August 30, 2024. The company’s estimated cost of the revised plan hit about $4 billion before technical-economic feasibility studies and the front-end engineering design work.

The revised development and production plan envisions the production and processing of natural gas from the field initially through four production wells connected to an FPU positioned over the field, with a nominal maximum production capacity of around 800 million cubic feet per day. The gas from the project is expected to be exported from the FPU via a pipeline to the Egyptian transmission system.

The approval of Aphrodite DPP follows inroads made by Cyprus and Egypt to develop their energy ties, with an emphasis on cooperation in joint infrastructure projects for the transportation of natural gas, especially from the Cronos discovery in Block 6. The two countries see such infrastructure as part of a new energy corridor from the Eastern Mediterranean to Europe.