Egypt’s gas deficit threatens Cypriot exports

Cyprus approved development of its Kronos offshore gas field on May 19, breaking a 15-year deadlock over its eastern Mediterranean reserves. The plan targets first sales to Europe by 2028, routed through Egyptian liquefaction plants. But Egypt has swung from gas exporter to record importer since 2024. Before Cypriot gas reaches European buyers, it may first need to cover an Egyptian shortfall.

The Deal and the Route

The Cypriot cabinet signed off on the development plan and core terms of a Gas Sales Agreement for Kronos, located in Block 6 of Cyprus's exclusive economic zone (the offshore waters where a coastal state has resource rights). Kronos belongs to a cluster of discoveries, including Aphrodite, Zeus, and Calypso, with combined estimated resources of around 10 trillion cubic feet earmarked for export (Politis). No separate reserve estimate for Kronos alone has been published.

The operating consortium, ENI and TotalEnergies, each holding 50%, plans to pipe gas to Egypt's Zohr offshore infrastructure, then liquefy it at the Damietta terminal for shipment to Europe. If a final deal closes in the coming weeks, first production could arrive by late 2027 or the first half of 2028 (Cyprus Mail, Protothema).

Cyprus chose this route because it has no liquefaction plants of its own. The EastMed pipeline, a proposed 1,900-km subsea link to Italy via Greece, was effectively shelved after the US withdrew support in 2022. Egypt offered existing infrastructure and proximity. In February 2025, ENI and TotalEnergies signed a trilateral agreement with Egypt and Cyprus formalising the export path.

Egypt Gets First Dibs

Egypt's gas production fell from 70.4 billion cubic metres (bcm) in 2021 to 49.4 bcm in 2024, a one-third drop in three years driven partly by declining output from the giant Zohr field. The country went from exporting 7 million tonnes of LNG (liquefied natural gas, cooled for tanker transport) in 2022 to importing a record 9.01 million tonnes in 2025.

The Damietta terminal earmarked for Cypriot gas restarted in January 2024 but shut again by May because Egypt needed the gas domestically. The contract itself reflects this tension: according to Al Manassa, Egypt's domestic demand gets priority, with a quarterly review that can redirect gas away from European exports. If Egypt's deficit persists, European buyers could find themselves waiting quarter after quarter for gas they've contracted.

The Oxford Institute for Energy Studies titled its March 2025 analysis "Cyprus upstream to help stabilize Egypt gas balances", not "to supply Europe." The most authoritative energy research body examining this deal frames it as an Egyptian stabilisation measure first and a European supply source second.

What's Still Missing

The EU consumed roughly 332 bcm of gas in 2024. Kronos at full capacity could deliver an estimated 6–8 bcm per year, under 2.5% of that total. In a market where Russia's pipeline share dropped from roughly 40% in 2021 to about 6% in 2025, every new source helps at the margin. Useful, but not transformative.

Other southeastern European gas projects are on similar timelines. Romania's Neptun Deep expects first gas by autumn 2027 with capacity of 8 bcm per year. But Kronos is the only one whose export route runs through a country that may keep the gas for itself.

The deal also isn't done. ENI has not taken its final investment decision (the formal go-ahead to commit the money). The subsea pipeline to Egypt still needs to be built, and commercial terms remain confidential. As Politis noted, a discovery does not equal a development plan, a plan does not equal an investment decision, and an investment decision does not mean extraction.

The Aphrodite field, discovered off Cyprus in 2011, still isn't producing and may not until 2031. Kronos has moved faster on paper. Whether it moves faster in practice depends on a variable Cyprus doesn't control: Egypt's growing appetite for its own gas.