Cyprus, Egypt set to sign deal for offshore gas pipeline

Europe stands to gain from an agreement Egypt is set to sign with the Mediterranean island nation of Cyprus to pipe offshore natural gas to processing plants in the north African country where it will be liquefied for export, Egypt's oil minister said Tuesday.

Tarek el-Molla said that under the terms of the agreement, gas off Cyprus could also be used for Egypt's domestic needs.

"So it is really a way to have ... good, win-win positions for not only Cyprus and Egypt, but also for Europe," El-Molla told reporters after talks with Cypriot President Nicos Anastasiades.

Cyprus' energy minister, Georgios Lakkotrypis, called the agreement— to be signed Wednesday — a first of its kind for the region that could bolster Europe's energy security.

Lakkotrypis said the agreement could act as an example for other neighboring countries to offer oil and gas companies the kind of security on their investment so they can proceed with projects worth billions.

The Cypriot minister said the agreement concerns building a pipeline from the Aphrodite deposit — estimated to contain around 4.5 trillion cubic feet (130 billion cubic meters) of gas — to Egypt. But it can apply to other gas fields that may be discovered off the island in the future.

"This is a European pipeline because the natural gas that will be conveyed to Egypt from Aphrodite, after the commercial agreements are completed, will find its way to Europe in liquefied form," Lakkotrypis said.

Talks to hammer out a commercial deal for the pipeline will start soon, he said.

Italian company Eni has discovered another gas deposit southwest of Cyprus, but its size hasn't been determined yet. ExxonMobil will begin a hydrocarbon search off Cyprus later this year. France's Total is also licensed to search for gas.