Eni Awards Key Contracts for Cronos Gas Project

SUBSCRIBE SEARCH ARTICLES NEWS Eni signed the main engineering, procurement, construction and drilling contracts for Cyprus' first natural gas development, designed to supply Europe via Egypt's liquefied natural gas infrastructure. Image by Thossaphol via iStock

Eni SpA said it had signed the main engineering, procurement, construction and drilling contracts for Cyprus' first natural gas development, designed to supply Europe via Egypt's liquefied natural gas infrastructure.

The awards mean the Cronos deepwater gas field is now in the execution phase, Italy's state-backed Eni said in a press release. Equal co-owners Eni (operator) and TotalEnergies SE reached a final investment decision (FID) three months ago.

"The awarded contracts include floating control unit, transportation and installations, offshore sealines, subsea production system, flexible lines, umbilicals, onshore line EPC [and] drilling rig services", Eni said, without naming the contractors.

Expected to start production 2028, the Mediterranean project will produce up to 500 million cubic feet per day of gas, which will be liquefied to around 2.8 million metric tons per annum (MMtpa) in Egypt for export mainly to Europe, according to the owners.

Last month McDermott International Ltd announced a "substantial" contract to "provide project management, engineering, procurement and installation support" for the Cronos project.

Houston, Texas-based McDermott did not specify the contract value, but the company defines a "substantial" contract as ranging from $500 million to $750 million.

"The project will be executed by the Subsea and Floating Facilities team with expertise and resources from Houston, Perth, London and Kuala Lumpur, supported by the company's marine construction fleet", McDermott said.

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Baker Hughes Co on Tuesday also confirmed "a significant integrated subsea systems award" for the project.

"The scope includes four subsea tree systems, wellheads, manifolds and connections, topside controls and associated services", the Houston-headquartered company said in its quarterly report.

Also on Tuesday Saipem SpA said it had received a contract for the Saipem 10000 drillship from Eni to drill offshore Cyprus.

"Cronos' fast-track initiative marks a concrete milestone in positioning Cyprus as a European gas producer and exporter and it unlocks the establishment of a regional gas hub in the Eastern Mediterranean by leveraging Egypt's existing hydrocarbon infrastructure", Eni chief executive Claudio Descalzi said in the FID announcement July 28.

Cronos, located about 185 kilometers (114.95 miles) southwest of Cyprus' coast, is in Block 6, which Eni says holds over three trillion cubic feet of initial gas in place.

The development involves four subsea fields, whose output will be processed at existing facilities at the Eni majority-owned Zohr field in Egypt, then liquefied at the North African country's Damietta LNG terminal for export overseas, according to the Cronos partners.

"Through the marketing of 50 percent of the LNG volumes, equivalent to 1.4 MTPA [million metric tons per annum], Eni will increase its contracted LNG portfolio supporting its strategic ambition to exceed 20 MTPA by 2030", Eni said.

TotalEnergies, meanwhile, aims to raise its LNG portfolio to 60 MMtpa by the end of the decade.

"The project could also enable, in the future, the development of additional resources located in Block 6, which will be appraised during upcoming campaigns", TotalEnergies said separately in July.

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