Chevron Corporation CVX, the U.S. oil and gas giant, and its consortium partners, Shell plc. and NewMed Energy, have received approval for the updated development and production plan (DPP) for the Aphrodite gas development from Cyprus’ Ministry of Energy, Commerce and Industry. The updated DPP was submitted by the Chevron-led consortium in 2024 and is estimated to cost$4 billion.
The updated DPP is aimed at accelerating the technical and engineering stages of the project. This should lead to front-end engineering and design (FEED), and ultimately, the Final Investment Decision (FID) for the Aphrodite gas field. The approved plan also covers the construction of a floating production unit (FPU) above the Aphrodite field’s reservoir and the installation of subsea pipelines for exporting gas to Egypt.
The FPU for the Aphrodite field is anticipated to have a maximum production capacity of 800 million cubic feet (MMCF) of gas per day. At the initial stage, the gas will be extracted through four producing wells and then transported through a subsea pipeline linked to the Egyptian transmission system, per NewMed Energy.
Following the Cypriot government’s approval, an amendment was made to the gas field's Production Sharing Contract. This amendment, aimed at revising the milestones set for its development, has been signed between the Cypriot government and the field partners. Among other milestones, it includes a commitment to reach an FID for the gas field's development in 2027.
As mentioned, the total cost of the project was estimated to be $4 billion, prior to the completion of technical and economic feasibility studies. This also includes the FEED and pre-FEED study related to the updated development plan. The updated development plan shall be realized subject to the performance of the pre-FEED and the FEED studies, among other factors. The results of these studies will also decide if an FID can be reached.
CVX mentioned that it values its partnership with the Republic of Cyprus. The development of the Aphrodite gas field should benefit the national and eastern Mediterranean regions as well. Furthermore, natural gas, being a cleaner burning fuel, should align with Chevron’s broader strategy to provide greener and more reliable energy to its customers.
The Aphrodite gas field is located nearly 160km toward the south of Limassol, at water depths of 1,700 meters. Production from this field is estimated to begin in 2031.
CVX currently carries a Zacks Rank #3 (Hold).
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