Nicosia, Jan 24 (AP) Egypt and a consortium made up of energy companies Total of France and Italy's Eni will next month sign a key agreement to transport natural gas from an undersea deposit inside Cypriot waters to Egypt where it will be liquefied and processed for export, officials said Friday.

Cypriot Energy Minister George Papanastasiou described the agreement as “most significant” because it allows the consortium to sort out all the technical details on how to get the gas from the Cronos gas deposit to Egyptian processing plants for liquefaction and eventual export to markets including Europe.

Papanastasiou said the Eni-Total consortium, which holds exploratory licenses for seven of 13 areas or blocks inside Cyprus' offshore economic zone, will make a final decision on how it will extract and convey the gas before the summer this year.

A recent assessment indicates that Cronos is estimated to hold more than the Aphrodite deposit, the first major discovery inside Cypriot waters which is estimated to contain 4.2 trillion cubic feet of gas.

The so-called host-government agreement will be signed at Egypt's energy summit that will be held between Feb. 17-19, said Egyptian Oil Minister Kadim Badawi, who met earlier with Cypriot President Nikos Christodoulides.

Badawi said Egyptian President Abdel Fattah el-Sissi has invited his Cypriot counterpart to attend the summit. The Egyptian official hailed the “collaborative spirit” with which both countries have been negotiating in recent months to use Egypt's existing infrastructure and make the most of “the great potential that Cyprus holds in terms of natural gas.” The agreement is the latest in a string of recent developments surrounding Cyprus' natural gas potential.

Also on Friday, ExxonMobil and partners Qatar Petroleum announced the start of drilling at the offshore Elektra well, near to its existing Glaucus deposit which is estimated to contain 5 to 8 trillion cubic feet of gas.

Papanastasiou said there are "positive" indications of a natural gas deposit at the Elektra well some 6 kilometers (3.72 miles) beneath the surface of the sea. He said preliminary results of the drill are expected in early April.

ExxonMobil and Qatar Petroleum hold exploration rights for two Cypriot blocks.

Cyprus is moving its energy generation away from dependence on crude oil in favor of cleaner, cheaper natural gas. Plans for an onshore terminal to turn liquefied natural gas back into gaseous form have been delayed, but in the meantime Cyprus wants to use a tanker that was part of the terminal contract to process gas.

Pananastasiou said Egypt has expressed interest in using the Prometheus tanker for its own purposes until Cyprus has finished its land-based infrastructure that would allow it to import gas for cheaper electricity generation.

Because of contracts with energy companies on where Cypriot natural gas will go, it's not certain Cypriot gas will be used for the island's own power needs. Cyprus will likely by natural gas from other markets, but it'll still be cheaper.

The Cypriot energy minister said Cyprus and Egypt will also sign a separate agreement at the Egyptian energy summit that foresees conveying natural gas from the Aphrodite deposit to Egypt. But it hasn't been decided yet with a Chevron-led consortium that operates Aphrodite whether the gas will be used for domestic energy needs or be made available for export after processing in Egypt.

Negotiations between Cyprus and Chevron regarding Aphrodite are still ongoing. (AP) GSP

Host-government agreement enables transport and Egyptian processing of Cypriot offshore gas for liquefaction and export. A host-government agreement will establish the framework for transporting natural gas from a Cypriot offshore deposit to Egyptian processing plants for liquefaction and export, allocating responsibility between Egypt and a consortium led by Eni and Total to finalise extraction and conveyance methods and leveraging Egyptian infrastructure pending completion of Cyprus's onshore facilities.