Aphrodite: term sheet and Host Government Agreement
On April 9, 2026, the Aphrodite gas field consortium—comprising Chevron (35%), Shell (35%) and NewMed Energy (30%)—together with the Cyprus Hydrocarbons Company (CHC), signed a term sheet with the Egyptian Natural Gas Holding Company (EGAS) for the sale of all recoverable gas from Block 12 in Cyprus’s exclusive economic zone.
In parallel, the parties signed a Host Government Agreement (HGA) with the Egyptian government, establishing the regulatory framework for the construction, financing and operation of the export subsea pipeline.
Document close was reached during the EGYPES conference held in Cairo on March 30, making this the most tangible outcome of Africa and the Middle East’s largest gas event. The term sheet and the HGA are expected to complete formal signing in the coming weeks.
Subsea infrastructure: from Cyprus to Port Said
The transportation scheme предусматривает a subsea pipeline from the Cyprus–Egypt maritime border crossing point to the onshore terminal at Port Said. The offshore delivery point will be defined at the maritime border.
To build and operate this infrastructure, a special purpose vehicle named Aphrodite Midstream Company (AMC) will be established.
At the end of the contract—either upon expiry of the binding agreement or 17 years after transportation begins—AMC will be required to decommission the pipeline or transfer it to the Egyptian government, at the latter’s discretion.
The revised development plan for the Aphrodite field includes four production wells connected to a Floating Production Unit (FPU) with a nominal capacity of up to 800 MMcf/d.
Commercial model: Brent-indexed take-or-pay
The agreement will adopt a take-or-pay mechanism: EGAS commits to pay for the agreed volumes regardless of actual consumption, ensuring revenue predictability for the consortium.
The gas price will be indexed to Brent crude within bands with previously agreed minimum and maximum levels.
The maximum time horizon—including the extension—could reach 20 years, making Aphrodite a long-life asset within Chevron’s and Shell’s Mediterranean portfolios.
Strategic implications for the Eastern Mediterranean
The signing of the term sheet and the HGA represents the strongest catalyst to date for the consortium to take FID, originally committed to the Cypriot government for 2027.
From a geopolitical perspective, the agreement strengthens Egypt’s role as a regional natural gas hub, leveraging its liquefaction infrastructure in Idku and Damietta to eventually re-export Cypriot gas to European markets as LNG.
For NewMed Energy and Israel, the agreement reinforces the thesis of turning the geographic proximity between Israel, Cyprus and Egypt into an exportable competitive advantage.
The Eastern Mediterranean thus emerges as an integrated energy corridor, with the capacity to contribute to Europe’s security of supply in a context of accelerated transition toward lower-carbon-intensity sources.
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