Chevron Receives Approval for Aphrodite Gas Field Development

Chevron Corporation CVX, the U.S. oil and gas giant, and its consortium partners, Shell plc. and NewMed Energy, have received approval for the updated development and production plan (DPP) for the Aphrodite gas development from Cyprus’ Ministry of Energy, Commerce and Industry. The updated DPP was submitted by the Chevron-led consortium in 2024 and is estimated to cost$4 billion.Key Infrastructure PlansThe updated DPP is aimed at accelerating the technical and engineering stages of the project. This should lead to front-end engineering and design (FEED), and ultimately, the Final Investment Decision (FID) for the Aphrodite gas field.  The approved plan also covers the construction of a floating production unit (FPU) above the Aphrodite field’s reservoir and the installation of subsea pipelines for exporting gas to Egypt.Production and Transmission DetailsThe FPU for the Aphrodite field is anticipated to have a maximum production capacity of 800 million cubic feet (MMCF) of gas per day. At the initial stage, the gas will be extracted through four producing wells and then transported through a subsea pipeline linked to the Egyptian transmission system, per NewMed Energy. Amendment Made to the Production Sharing ContractFollowing the Cypriot government’s approval, an amendment was made to the gas field's Production Sharing Contract. This amendment, aimed at revising the milestones set for its development, has been signed between the Cypriot government and the field partners. Among other milestones, it includes a commitment to reach an FID for the gas field's development in 2027.As mentioned, the total cost of the project was estimated to be $4 billion, prior to the completion of technical and economic feasibility studies. This also includes the FEED and pre-FEED study related to the updated development plan. The updated development plan shall be realized subject to the performance of the pre-FEED and the FEED studies, among other factors. The results of these studies will also decide if an FID can be reached.Regional Benefits to the Development of the Gas FieldCVX mentioned that it values its partnership with the Republic of Cyprus. The development of the Aphrodite gas field should benefit the national and eastern Mediterranean regions as well. Furthermore, natural gas, being a cleaner burning fuel, should align with Chevron’s broader strategy to provide greener and more reliable energy to its customers.The Aphrodite gas field is located nearly 160km toward the south of Limassol, at water depths of 1,700 meters. Production from this field is estimated to begin in 2031.CVX’s Zacks Rank and Key PicksCVX currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the energy sector are SM Energy SM, Equinor ASA EQNR and Archrock Inc. AROC. SM Energy currently sports a Zacks Rank #1 (Strong Buy), while Equinor and Archrock carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The increased production, combined with the favorable oil price environment, is expected to positively contribute to its bottom line.Equinor ASA is one of the leading integrated energy companies globally and the second-largest supplier of natural gas in Europe. The company’s expansion in the renewable energy space positions it for long-term growth as more and more countries transition toward cleaner energy solutions to meet their climate goals. Its strategic pivot toward low-carbon energy solutions unlocks new revenue streams in the growing market for clean energy and carbon management solutions.Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. 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