Egypt wants Cyprus gas

Financial Mirror (Cyprus) - - FRONT PAGE -

Egypt is will­ing to take as much of the fu­ture nat­u­ral gas sup­ply that Cyprus can ex­port, to sat­isfy its grow­ing en­ergy deficit and power its rapid pop­u­la­tion growth, its en­ergy min­is­ter said after a meet­ing in Nicosia.

Egyp­tian Oil Min­is­ter Sherif Is­mail told his Cypriot and Greek coun­ter­parts that his coun­try is will­ing to re­ceive as much gas as Cyprus is able to ex­port, a dec­la­ra­tion that could also calm lo­cal fears that fu­ture up­stream pro­duc­tion would have to be piped north to Turkey in or­der to reach Europe.

“Egypt has a very huge (nat­u­ral gas) in­fra­struc­ture and can ac­com­mo­date the pro­duc­tion com­ing from Cyprus,” Is­mail told re­porters.

Egypt had a short­fall of about 700 mln stan­dard cu­bic feet that needed to be met by im­ports, Is­mail said after talks with host En­ergy Min­is­ter George Lakkotrypis, adding that the pos­si­bil­ity of re-ex­port­ing Cypriot gas from Egypt was also an op­tion.

The first out­put from any off­shore Cyprus gas­field is not seen any time be­fore 2020 or 2021 at the ear­li­est.

Lay­ing a south­ward pipe­line also makes bet­ter eco­nomic sense than build­ing a land­based LNG plant that ex­perts say is not vi­able with the cur­rent es­ti­mates ly­ing in the Cyprus gas­fields.

Lakkotrypis said the best way for Cyprus to ex­port to Egypt was di­rectly via a pipe­line.

“Dur­ing the next two months we will have be­fore us a tech­ni­cal study about the op­tions re­gard­ing th­ese ex­ports,” he said.

US-based Noble En­ergy, ex­plor­ing for hy­dro­car­bons in Block 12 of the Cyprus ex­clu­sive eco­nomic zone (EEZ) since 2011, has set­tled for an es­ti­mated 3.6 trln cu­bic feet of re­serves, but plans to drill fur­ther ex­ploratory wells in other ar­eas of the block, dubbed ‘Aphrodite’.

Noble’s ju­nior Is­raeli part­ners, Delek and Avner, in­volved in sim­i­lar joint ven­tures in the gi­ant ad­ja­cent Le­viathan field, re­cently re­vised their es­ti­mates for ‘Aphrodite’ by 10% say­ing re­serves there could even reach 4 tcf.

What­ever the case, any­thing be­low 6 tcf makes an on­shore LNG plant not com­mer­cially vi­able, which would raise a fur­ther ques­tion of how to ex­port liq­ue­fied nat­u­ral gas to in­ter­na­tional cus­tomers.

A se­nior Noble ex­ec­u­tive has also con­sid­ered the idea of a float­ing LNG plant (FLNG) that would liq­uefy the gas at source and load onto LNG ves­sels.

In Septem­ber, the Ital­ian-Korean con­sor­tium ENI-Ko­gas be­gan deep sea ex­ploratory drilling and ex­pects to an­nounce its first test re­sults by the end of De­cem­ber, while French To­tal is also ex­pected to em­bark on drilling ven­tures in its own li­censed gas­fields dur­ing the first half of 2015.

Lakkotrypis, Is­mail and the Greek Min­is­ter of En­vi­ron­ment, En­ergy and Cli­mate Change, Yian­nis Ma­ni­atis, is­sued a joint dec­la­ra­tion on Tues­day in their first meet­ing after their heads of state held a meet­ing in Cairo on Novem­ber 8 and agreed on co­op­er­a­tion on en­ergy and re­gional se­cu­rity mat­ters.

At the time, the tri­par­tite lead­ers’ agree­ment said it was not aimed to any coun­try in the re­gion and was open to oth­ers join­ing this new al­liance, hint­ing at Is­rael and Le­banon.

In Nicosia, the three en­ergy min­is­ters “ex­pressed their readi­ness to ex­am­ine ways and means for the op­ti­mal de­vel­op­ment of hy­dro­car­bons.”

The joint dec­la­ra­tion said that “the min­is­ters had the op­por­tu­nity to re­it­er­ate their shared con­vic­tion that the dis­cov­ery of im­por­tant hy­dro­car­bons re­serves in the East­ern Mediter­ranean could and must serve as a cat­a­lyst for a broader co­op­er­a­tion on a re­gional level, con­tribut­ing thus to the peace and sta­bil­ity in the re­gion.”

Ar­eas where the three will see im­me­di­ate co­op­er­a­tion in­clude en­vi­ron­men­tal stan­dards in off­shore hy­dro­car­bons op­er­a­tions, se­cu­rity of off­shore hy­dro­car­bons op­er­a­tions, en­ergy in­fra­struc­ture, re­search and de­vel­op­ment, and in­sti­tu­tional ex­per­tise and ca­pac­ity build­ing.

Mean­while, Le­banon’s For­eign Min­is­ter Ge­bran Bas­sil will be in Cyprus on Wed­nes­day for talks fo­cus­ing on en­ergy is­sues, the Cyprus prob­lem and bi­lat­eral con­cerns.

An of­fi­cial an­nounce­ment said Bas­sil will first meet with his Cypriot coun­ter­part Ioan­nis Ka­soulides and will then be re­ceived by Pres­i­dent Anas­tasi­ades, fol­lowed by talks with Lakkotrypis. Cyprus, Is­rael and Egypt are the only three in the east­ern Mediter­ranean that have de­lin­eated their EEZs and have auc­tioned ex­plo­ration and pro­duc­tion li­cences to en­ergy com­pa­nies. Greece is in that process and needs to con­clude de­lin­eation agree­ments with Egypt, while Le­banon has fallen be­hind, due to in­ter­nal po­lit­i­cal con­flicts and has yet to rat­ify the EEZ agree­ment with Cyprus.

In the ab­sence of sta­ble gov­ern­ment in Beirut, li­cens­ing has also been post­poned un­til well into 2015, while the war in Syria and the state of con­flict with Is­rael, as well as a dis­pute over Is­rael’s reach into what Le­banese call their own EEZ, also pre­vents a three-way agree­ment be­ing reached with Cyprus on common mar­itime ter­ri­to­ries.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.