Project Economics
Understanding the economics of Cyprus gas projects helps assess their commercial viability. This page covers development costs, breakeven prices, and expected returns.
$10-15B
Total Investment
$4-6
Breakeven $/MMBtu
15-20%
Target IRR
20-25
Years Production
Development Cost Breakdown
Aphrodite (Egypt Pipeline Option)
Subsea Wells & Manifolds $1.0-1.5B
Export Pipeline to Egypt $0.8-1.0B
Platform/FPSO $0.5-0.8B
Onshore Facilities $0.3-0.5B
Other (EPCM, Contingency) $0.3-0.5B
Total Estimated CAPEX $3.0-4.0B
Block 6 Cluster (FLNG Option)
FLNG Vessel $3.0-4.0B
Subsea Infrastructure $1.5-2.0B
Development Wells $0.8-1.0B
Other $0.3-0.5B
Total Estimated CAPEX $5.5-7.5B
Breakeven Gas Price
Breakeven price is the minimum gas sale price needed to achieve an acceptable return on investment (typically 10-15% IRR). Cyprus projects generally require $4-6/MMBtu.
| Project | Breakeven | Current TTF | Margin |
|---|---|---|---|
| Aphrodite (Egypt route) | $4.0-4.5 | $10-12 | Strong |
| Block 6 (FLNG) | $5.0-6.0 | $10-12 | Good |
| EastMed Pipeline | $6.0-7.0 | $10-12 | Marginal |
Note: European gas prices (TTF) have been volatile. Long-term contracts typically price at a discount to spot. Projects are generally sanctioned with $6-8/MMBtu assumptions.
Operating Costs
Typical OPEX Components
- Lifting costs $1.0-1.5/MMBtu
- Transport/Processing $0.5-1.0/MMBtu
- LNG Liquefaction $1.5-2.0/MMBtu
- G&A, Insurance $0.3-0.5/MMBtu
Government Take
- Royalty 10%
- Profit Share (avg) 15-30%
- Corporate Tax 12.5%
- Total Government Take 50-60%
Regional Project Comparison
| Project | Country | CAPEX | Breakeven |
|---|---|---|---|
| Leviathan | Israel | $3.8B | $3.5-4.0 |
| Zohr | Egypt | $12B | $3.0-3.5 |
| Aphrodite | Cyprus | $3-4B | $4.0-4.5 |
| Karish | Israel | $1.7B | $4.0-4.5 |
Cyprus projects are competitive with regional peers. The Egypt pipeline option for Aphrodite offers economics comparable to successful Israeli developments.