Aphrodite Group Initiates Prelim Deals for Sale of Cypriot Gas to Egypt

The Aphrodite consortium led by Chevron Corp has secured commitment from relevant parties to execute a term sheet and a host government agreement (HGA) to enable the piped export to Egypt of 100 percent of production from the field mainly located in Cypriot waters.

Eventually the parties would sign a binding agreement for at least 15 years and up to 20 years of sales to state-owned Egyptian Natural Gas Holding Co (EGAS). Export volumes would be increased to 700 million cubic feet per day after at least six years from when commercial supply began, Aphrodite co-owner NewMed Energy LP said in a stock filing Thursday.

An assessment commissioned by NewMed, published last month, increased the best estimate of contingent natural gas resources on Cyprus' side of Aphrodite, located on the maritime border with Israel, by about 4 percent to 3.67 trillion cubic feet.

"In the TS [term sheet], the parties confirmed the commercial principles and conditions that will serve as a basis for the signing of a binding agreement for the supply of natural gas from the Aphrodite reservoir to the Buyer in relation to all of the gas quantities recoverable from the reservoir", the regulatory disclosure said.

Meanwhile, under the HGA, the companies agreed to execute agreements to build a pipeline to carry Aphrodite gas to EGAS. "The final delivery point shall be determined at the metering station at the onshore terminal in Port Said, Egypt, while the offshore delivery point shall be defined as the Cyprus-Egypt maritime border crossing point", NewMed said.

"The HGA further provides that for purposes of implementation of the transmission project, a special purpose company to be incorporated in Egypt - Aphrodite Midstream Co (AMC), shall be founded, and shall be held by the Aphrodite partners and by an entity to be appointed by the Egyptian government, with each one of the shareholders financing its share according to its pro-rata holdings (yet to be determined) and under the same conditions", NewMed said.

"In the HGA, the Egyptian government confirmed its full commitment to support the transmission project, and undertook that the State’s authorities will work on taking all of the actions required for execution of the transmission project", it added.

NewMed expects the term sheet and the HGA to complete signatures "in the coming weeks".

Aphrodite mostly lies in Block 12 in Cyprus' exclusive economic zone, while "a few percent" of the area is in Israel's Ishai/370 lease, according to NewMed. Negotiations have been taking place between the Cypriot and Israeli governments on in-principle agreements about their interests in the field, NewMed said in a filing March 9.

"In these agreements, the reservoir will be developed by the interest holders on the Cypriot side, while the holders of the Ishai Lease and the state of Israel will receive one-time compensation for their share in the reservoir, the rate of which shall be determined by an international expert", the filing said.

Last year the Aphrodite consortium sanctioned pre-construction works for the delayed project agreed with Nicosia.

"[T]he partners in the reservoir adopted a decision on commencement of FEED [front-end engineering design] for the production systems and the transmission infrastructure in the sum of approx. $105.7 million", NewMed said in a filing December 23, 2025.

Earlier last year Cyprus approved a $4-billion updated development plan, following failed talks on cost-saving changes to the original terms approved by the government November 2019, according to a NewMed filing February 15, 2025.

"Concurrently, an amendment was signed between the partners and the Cypriot government to the PSC [production sharing contract], in the context of which the partners undertook, inter alia, to adopt a final investment decision in 2027", the February 2025 announcement said.

The new plan envisions four initial production wells to be connected to a floating production unit with a capacity of about 800 million cubic feet a day.

Chevron operates Aphrodite with a 35 percent stake through Chevron Cyprus Ltd. Shell PLC's BG Cyprus Ltd also owns 35 percent. NewMed, part of Israel's Delek Group, holds the remaining 30 percent.

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