Egypt’s Gas Squeeze Threatens Cyprus Exports

Cyprus has waited 15 years for its offshore gas promise to become more than a line on an energy map. On May 19, its cabinet approved development of the Kronos field in the eastern Mediterranean, with first sales to Europe targeted for 2028 through Egyptian liquefaction plants. The difficulty is that Egypt, the country meant to process the gas, has since turned from exporter into a record importer. Before Kronos reaches Europe, it may be pulled into Egypt’s own shortage.

The Deal and the Route

The Cypriot cabinet approved the development plan and core terms of a Gas Sales Agreement for Kronos, in Block 6 of Cyprus’s exclusive economic zone, the offshore area where a coastal state holds resource rights. Kronos sits among 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%, wants to pipe the gas to Egypt’s Zohr offshore infrastructure, then liquefy it at Damietta for shipment to Europe. If the final deal closes in the coming weeks, first production could arrive by late 2027 or the first half of 2028 (Cyprus Mail, Protothema).

Cyprus has chosen Egypt because it has no liquefaction plants of its own. The EastMed pipeline, the proposed 1,900-km subsea link to Italy through Greece, was effectively parked after the US withdrew support in 2022. Egypt had what Cyprus lacked: nearby infrastructure already built. In February 2025, ENI and TotalEnergies signed a trilateral agreement with Egypt and Cyprus setting out that export route.

Egypt Gets First Dibs

Egypt’s gas production has fallen hard, from 70.4 billion cubic metres (bcm) in 2021 to 49.4 bcm in 2024. That is a one-third drop in three years, driven partly by declining output from the giant Zohr field. In 2022, Egypt exported 7 million tonnes of LNG, liquefied natural gas cooled for tanker transport. By 2025, it was importing a record 9.01 million tonnes.

Damietta, the terminal marked for Cypriot gas, shows the problem neatly. It restarted in January 2024 but shut again by May because Egypt needed the gas at home. The contract appears to build in that reality: according to Al Manassa, Egyptian domestic demand gets priority, with a quarterly review that can redirect gas away from European exports. If the deficit lasts, European buyers may find themselves waiting, quarter after quarter, for gas they thought they had secured.

The Oxford Institute for Energy Studies gave its March 2025 analysis the title "Cyprus upstream to help stabilize Egypt gas balances", not "to supply Europe." That phrasing matters. The most authoritative energy research body looking at the deal sees it first as a way to steady Egypt’s gas system, and only then as a new source for Europe.

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 a year, less than 2.5% of that total. In a market where Russia’s pipeline share has fallen from roughly 40% in 2021 to about 6% in 2025, every extra source has value. It helps at the margin. It does not change the whole map.

Other south-eastern European gas projects are moving on similar timelines. Romania’s Neptun Deep expects first gas by autumn 2027 with capacity of 8 bcm per year. Kronos is different because its export route runs through a country that may decide it needs the gas more than Europe does.

The deal is also still short of the point where steel meets seabed. ENI has not taken its final investment decision, the formal approval to commit the money. The subsea pipeline to Egypt still has to be built, and the commercial terms remain confidential. As Politis noted, a discovery is not a development plan, a plan is not an investment decision, and an investment decision is not extraction.

Aphrodite, discovered off Cyprus in 2011, still is not producing and may not do so until 2031. Kronos has moved faster on paper. Whether it moves faster in practice depends on the variable Cyprus cannot control: Egypt’s growing appetite for its own gas.