**NICOSIA** – Just over a month into 2026, Cyprus finds itself at a pivotal juncture in its energy trajectory, grappling with the complex interplay of ambitious natural gas exploration, evolving global market dynamics, and the persistent challenge of achieving ambitious climate objectives. Developments within the island nation's Exclusive Economic Zone (EEZ), particularly in Blocks 5, 6, and 10, are shaping its immediate energy priorities and long-term economic prospects.
A recent high-level meeting between ExxonMobil executives, including Vice-President John Ardill, and Cypriot President Nikos Christodoulides underscored the significant strides being made in the assessment and potential commercialisation of substantial offshore gas reserves. ExxonMobil is reportedly targeting the end of April for a "Declaration of Commerciality" for the Glaucus and Pegasus gasfields, located in Block 10. This crucial step signifies a commitment to developing these fields, with appraisal drilling for Pegasus slated for 2027. Furthermore, the energy giant is contemplating further exploration in Block 5, buoyed by hydrocarbon confirmations from early 2025, and is simultaneously pursuing exploratory ventures in Egypt's adjacent Masry and Cairo blocks.
The strategic importance of these discoveries is amplified by the current geopolitical landscape and the ongoing global energy transition. With Europe actively seeking to diversify its energy supplies and reduce reliance on Russian gas, Cyprus's natural gas resources present a compelling opportunity. Eni, another key player in the region, is advancing the development of the Cronos gasfield in Block 6, a project anticipated to yield approximately 3.5 trillion cubic feet of gas. Eni's strategy involves leveraging existing infrastructure, such as the Zohr gasfield in Egypt, to facilitate the rapid monetisation and export of Cronos's projected 5 billion cubic metres per annum as liquefied natural gas (LNG) to European markets. First gas from Cronos is expected early in 2028, a timeline that aligns with a projected softening of LNG prices in Europe post-2028, with estimates suggesting prices could settle between $6-8 per million British thermal units, alongside liquefaction and tolling fees potentially reaching $1.5 per million British thermal units.
However, the path to full commercialisation, particularly for the Glaucus and Pegasus fields, is a more extended one, with projections indicating a timeframe of 2030-2035, contingent on favourable outcomes. This extended development horizon coexists with a surge in global LNG project approvals in 2025 and the anticipation of approximately 300 billion cubic metres of new annual LNG export capacity coming online worldwide by 2030, largely driven by the Americas, especially the United States. This substantial increase in supply is poised to reshape global energy markets, potentially intensifying competition for buyers in both Europe and Asia, where Russia is also bolstering pipeline gas deliveries to China.
Despite these promising developments in natural gas extraction, the broader context of climate action presents a significant counterpoint. Recent pronouncements from the United Nations suggest that current national climate plans "barely move the needle" on global emission reduction targets, indicating a widening chasm between stated ambitions and tangible action. While renewable energy sources are experiencing growth, the International Energy Agency's outlook, supported by companies like Shell, suggests that natural gas demand is projected to rise into the 2040s, signalling a persistent role for fossil fuels in the global energy mix. This phenomenon has led to what some observers term an "energy addition" era, where the addition of new energy sources does not necessarily displace existing ones.
The economic viability of Cyprus's gas export plans, therefore, hinges not only on successful extraction but also on navigating these complex market forces and the imperative to reconcile energy security with climate responsibilities. The prevailing high energy costs in Europe are already impacting its industrial competitiveness and raising questions about the feasibility of maintaining ambitious climate goals without a pragmatic approach. This evolving landscape suggests a potential shift in global energy policy, prioritising "energy pragmatism" over an unyielding pursuit of emission reductions at any cost, a sentiment that will undoubtedly continue to shape Cyprus's energy future.