The 1.8 billion dollars in contracts that Eni signed on Monday for the subsea infrastructure of the Cronos gas field are a historic step but bring limited benefits to Cyprus, Charles Ellinas said. He argued that the island is left out of the revenue from liquefying the gas and selling it as LNG, where he said the biggest profits lie.
Ellinas acknowledged that the contracts, signed at the Presidential Palace, mattered because they open the way for Cyprus to start exporting natural gas, and said the development was certainly historic. In terms of financial gain, however, “unfortunately, the benefits for Cyprus are very low,” he said.
Cyprus’s part in the commercial use of the gas ends before it reaches the Damietta terminal in Egypt, according to Ellinas. The island has no share in liquefaction or in sales of the liquefied gas, which is where the greatest added value comes from, he said.
He also said many concessions had been made to Eni, particularly over the tariffs for using the infrastructure of Egypt’s Zohr field.
Responding to assessments that the project is of geostrategic importance to Cyprus, Ellinas noted that the country plays no part in selling the LNG and that Eni decides where it goes.
He described the field’s reserves as small, estimating that exports could reach four billion cubic metres a year. That is a little over 1 per cent of Europe’s annual gas consumption, which he put at about 340 billion cubic metres.
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