Poor nat­gas finds “no cause for dis­ap­point­ment”, LNG plant not shelved

Financial Mirror (Cyprus) - - FRONT PAGE -

Fail­ure of the ini­tial off­shore ex­ploratory drilling by an Ital­ian-Korean con­sor­tium to find sig­nif­i­cant quan­ti­ties of gas should not be a cause for dis­ap­point­ment, Pres­i­dent Ni­cos Anas­tasi­ades said after his Cab­i­net meet­ing on Tues­day fol­low­ing a three-week ab­sence in New York to fix his heart’s mi­tral valve.

The En­ergy Min­istry had said on Fri­day that the SAIPEM 10000 rig be­long­ing to the ENI-Ko­gas ven­ture drilled to a depth of 5,800 me­ters at the Onasago­ras prospect with­out suc­cess but that new drilling will be­gin else­where within the off­shore Block 9 where the con­sor­tium has iden­ti­fied six po­ten­tial gas­fields.

Anas­tasi­ades cited sev­eral ex­am­ples where ini­tial drills did not pro­duce sig­nif­i­cant re­sources and re­ferred to a large gas field off the coast of Norway where sub­stan­tial gas re­serves were only dis­cov­ered on the fourth at­tempt.

He added that ini­tial prospect­ing at Is­rael’s Le­viathan and Ta­mar fields near the Cyprus Ex­clu­sive Eco­nomic Zone (EEZ) also did not point to en­cour­ag­ing re­sults, but this was later re­versed through ma­jor gas finds there.

So far, Cyprus’ proven nat­u­ral gas re­serves off­shore have been limited to a field in Block 12, where US-based Noble En­ergy has dis­cov­ered be­tween 3.6 trln and 6 trln cu­bic feet of gas – not enough for a land-based liq­ue­fac­tion fa­cil­ity.

How­ever, Anas­tasi­ades said that the gov­ern­ment’s decision for the con­struc­tion of a liq­ue­fied nat­u­ral gas (LNG) ter­mi­nal is still on the ta­ble, but stressed that this decision is sub­ject to cer­tain con­di­tions.

He said that when the gov­ern­ment took its ini­tial decision it took into con­sid­er­a­tion in­for­ma­tion about a great amount of hy­dro­car­bon re­serves, which made this in­vest­ment a vi­able one.

The gov­ern­ment has re­peat­edly stressed that the decision to build an LNG ter­mi­nal will be finalized once the quan­ti­ties for hy­dro­car­bon re­serves found in Cyprus’ EEZ al­low such an in­vest­ment to be vi­able.

How­ever, re­cent talks with Egypt and Is­rael could pave the way for nat­u­ral gas to be piped straight to ei­ther coun­try, ei­ther for liq­ue­fac­tion and lo­cal con­sump­tion or for ex­port, pos­si­bly to western Europe that has seen sig­nif­i­cant sup­plies from Rus­sia di­verted to other mar­kets over the cri­sis in Ukraine and Euro­pean Union sanc­tions on Moscow.

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