Cyprus, Egypt sign deal paving way for gas pipeline

Cyprus and Egypt signed an agreement Wednesday that paves the way for the supply of gas to the Arab nation via an undersea pipeline that officials hope will create a regional energy hub.

Cypriot Energy Minister Yiorgos Lakkotrypis and Egypt's Petroleum Minister Tarek el-Molla said the deal sets the political framework for additional commercial agreements that will determine of how, where and when the gas will reach Egypt.

"This is part of the development of the east Mediterranean gas as a whole and I think our strategy optimally is to position ourselves as an energy hub in the region," el-Molla said after signing the agreement.

It is yet to be determined whether the gas will be used for Egypt's domestic needs or be liquefied at Egypt's processing plants for export to other markets. El-Molla said Egypt's large population and growing industry will need more energy, adding that gas "is the energy of the future" and will increasingly replace other hydrocarbons, like crude and coal.

Lakkotrypis said the first gas through the new pipeline should reach Egypt sometime between 2020 and 2022, but officials will try to speed up the timetable.

Hopes for energy finds in the region were buoyed last year when Italian firm Eni discovered in Egyptian waters what it touted as the largest ever gas find in the Mediterranean sea.