Cyprus expects to sign an agreement with Israel in 2026 for the development and exploitation of the Aphrodite gas field, President Nicos Christodoulides announced on Wednesday, “thus closing a long-standing issue” and taking another substantial step towards utilising the country’s energy resources.
According to the President, the agreement represents a significant milestone in unlocking Cyprus’s offshore energy resources, with detailed planning for the field’s development expected to be completed within the year, paving the way for the Final Investment Decision.
“In the area of energy security, in 2026 we expect the signing of the agreement with Israel for the development and exploitation of the Aphrodite field,” Christodoulides said during his annual governance planning address at the Presidential Palace, noting that detailed planning will be completed this year, “which constitutes a significant milestone for taking the Final Investment Decision.”
The announcement comes alongside the scheduled signature of commercial agreements for the Kronos and Aphrodite fields by March, whilst developments are also anticipated for the Kronos field regarding exports of Cypriot natural gas to Europe.
Strategic energy development framework
The Aphrodite field, located in Block 12 of Cyprus’s exclusive economic zone, has been a focal point of the country’s energy strategy since its discovery. The field’s development has faced various technical, commercial and geopolitical challenges over the years, making the anticipated 2026 agreement with Israel a breakthrough moment for Cyprus’s energy ambitions.
The agreement with Israel is expected to address transboundary issues and establish a framework for coordinated development, given that the Aphrodite reservoir extends into Israeli waters. This cooperation model demonstrates the practical application of international maritime law and bilateral relations in resolving complex energy resource questions.
Detailed planning to be completed within 2026 will encompass technical specifications for extraction infrastructure, pipeline routes, processing facilities, and export mechanisms. This comprehensive planning phase is essential for attracting investment and securing the commitments needed for the Final Investment Decision, which will trigger the major capital expenditure phase of the project.
Multiple fields advancing simultaneously
The parallel advancement of both Aphrodite and Kronos fields reflects a coordinated strategy to maximise Cyprus’s natural gas potential, the President stressed. The commercial agreements scheduled for signature by March 2026 will establish the contractual framework for development, including partnership structures, revenue sharing arrangements, and operational responsibilities.
For the Kronos field, specific developments are anticipated regarding export of Cypriot natural gas to Europe, addressing one of the key challenges in monetising Cyprus’s gas resources – establishing viable export routes to major markets. European demand for diversified natural gas supplies has increased significantly following geopolitical developments, potentially improving the commercial viability of Eastern Mediterranean gas projects.
The timing of these developments coincides with Cyprus’s EU Council Presidency in the second half of 2026, potentially providing additional momentum for advancing energy cooperation at the European level, the President said. Energy security has emerged as a critical priority for the European Union, with member states seeking to diversify supply sources and reduce dependency on single suppliers.
Regional energy cooperation
Cyprus’s energy strategy operates within a broader framework of regional cooperation that extends beyond bilateral agreements with Israel. The country has positioned itself, as Christodoulides described, as a stable and secure cooperation hub in a region of particular geostrategic importance, with energy resources playing a central role in this positioning.
The government continues to deepen relations with regional countries, building on existing partnerships whilst exploring new opportunities. Following emphasis on Africa in 2025, Cyprus will pursue closer ties with countries of special interest in 2026, including India and Central Asian states. Christodoulides announced he will visit India in May following an invitation from Prime Minister Modi, in reciprocation of the historic visit by the Indian leader to Cyprus.
These developing relationships carry potential implications for energy cooperation, including possible participation in energy projects, technology transfer, and access to growing Asian energy markets. India’s rapidly expanding energy demand makes it a particularly significant potential partner for Eastern Mediterranean gas producers.
Infrastructure and investment requirements
Successful development of the Aphrodite and Kronos fields will require substantial infrastructure investment, including offshore platforms, subsea pipelines, onshore processing facilities, and potentially liquefaction infrastructure for exports, the President said. The Final Investment Decision for Aphrodite will crystallise these infrastructure requirements and trigger the procurement and construction phases.
Cyprus has been working to create an attractive investment environment for energy projects through various policy measures, including its position as first in the European Union on taxation matters and second place regarding entrepreneurship incentives for innovative companies, according to government data.
The country is advancing procedures for privatisation of the Cyprus Stock Exchange within 2026, which could enhance access to capital markets for energy and other projects. The government is also promoting the establishment of a Business Development Organisation to support and finance entrepreneurship and innovation, with potential applications in the energy technology sector.
Geopolitical dimensions
Energy development in the Eastern Mediterranean carries significant geopolitical implications, with competing territorial claims and security concerns affecting project timelines and commercial viability. Cyprus’s cooperation with Israel on the Aphrodite field takes place against a complex regional backdrop that includes ongoing disputes over maritime boundaries and exploration rights.
The government has stressed its commitment to conducting energy activities in accordance with international law and UN Convention on the Law of the Sea principles. Cyprus maintains that its exploration and development activities occur within its legitimate exclusive economic zone and continental shelf areas.
Economic impact and revenue projections
Successful development of Cyprus’s gas fields promises significant economic benefits through direct revenues, job creation, industrial development and enhanced energy security. Natural gas revenues could provide funding for government priorities including infrastructure investment, social programmes, and debt reduction.
The government has emphasised that all policies planned for 2026 are costed and implementable, based on a strong and resilient economy. Energy revenues would strengthen this economic foundation, though actual revenue flows depend on successful completion of development phases and favourable market conditions.
Cyprus’s broader economic strategy includes positioning the country as a regional logistics hub, with creation of a modern supply chain network operating in synergy with ports and airports. Special supply and storage zones are planned for Larnaca and Paphos airports, potentially supporting energy sector logistics alongside other industries.
The government announced decisions to proceed with construction of a port in Vasilikos, with tenders to be issued within 2026, and completion of studies for Larnaca port development. These infrastructure projects could support energy sector activities whilst serving broader economic development objectives.
Climate considerations and energy transition
The development of natural gas resources occurs within the context of global energy transition and climate change mitigation efforts. Natural gas is generally considered a transition fuel – cleaner than coal or oil but still a fossil fuel that produces greenhouse gas emissions.
Cyprus has emphasised its commitment to addressing climate change impacts, with the president noting that the country is in one of the most climatically vulnerable regions of the planet. The government is implementing an early warning system for natural disasters, with full operation targeted for 2026, and completing construction of the Solea-Marathasa heliport to enhance aerial firefighting capabilities.
Within the framework of the Cypriot EU Presidency, a strategy for water resilience is being promoted, contributing to preparation of the new European Climate Change Adaptation Plan. These climate adaptation measures run parallel to energy development activities, reflecting the dual challenges of resource development and environmental protection.
Timeline and next steps
The coming months represent a critical period for Cyprus’s energy ambitions, with multiple milestones anticipated:
- March 2026: Signature of commercial agreements for Kronos and Aphrodite fields
- During 2026: Signature of agreement with Israel for Aphrodite development
- During 2026: Completion of detailed planning for Aphrodite field development
- During 2026: Developments on Kronos field regarding European exports
- Following detailed planning: Final Investment Decision for Aphrodite field
Each of these steps carries importance for maintaining momentum in the energy development programme and demonstrating progress to potential investors and partners. Delays at any stage could have cascading effects on subsequent phases.
The government has expressed confidence in achieving these milestones, whilst acknowledging the complex technical, commercial and diplomatic challenges inherent in major energy projects. Success will require coordination amongst multiple stakeholders including government agencies, energy companies, international partners, and regulatory authorities.
Regional cooperation framework
Cyprus’s energy strategy contributes to broader regional cooperation initiatives in the Eastern Mediterranean. The country has participated in various multilateral energy forums and cooperation mechanisms, seeking to establish frameworks for coordinated development and conflict prevention.
The East Mediterranean Gas Forum, which includes Cyprus, Egypt, Greece, Israel, Italy, Jordan and Palestine, provides a platform for cooperation on natural gas development and trade. Cyprus’s bilateral agreement with Israel on Aphrodite demonstrates how such multilateral frameworks can support specific bilateral projects.
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