Off­shore gas and pipe­line MoU signed with Egypt

Financial Mirror (Cyprus) - - FRONT PAGE -

The Cypriot Min­is­ter of En­ergy and the Egyptian Min­is­ter of Petroleum have a signed a mem­o­ran­dum of un­der­stand­ing (MoU) in Cairo for both the up­stream and down­stream ex­ploita­tion of out­put from the ‘Aphrodite’ off­shore gas­field and pos­si­ble liq­ue­fac­tion for ex­port us­ing ex­ist­ing plants in Egypt.

Fol­low­ing on their meet­ing in Ni­cosia on Novem­ber 25, the Min­is­ter of Petroleum and Min­eral Re­sources of Egypt, Sherif Is­mail and the Min­is­ter of En­ergy, Com­merce, In­dus­try and Tourism of Cyprus, Yior­gos Lakkotrypis, signed, in the pres­ence of the Egyptian Prime Min­is­ter Ibrahim Mahlab, a mem­o­ran­dum for co­op­er­a­tion in the field of oil and gas.

The MoU will, in­ter alia, fa­cil­i­tate the co­op­er­a­tion be­tween the two coun­tries in the devel­op­ment and ex­ploita­tion of the Cypriot ‘Aphrodite’ gas field in block 12 of the Cyprus Ex­clu­sive Eco­nomic Zone, util­is­ing gas in­fra­struc­ture ex­ist­ing in Egypt for the mu­tual ben­e­fit of the two coun­tries.

In par­tic­u­lar, the MoU au­tho­rises the Egyptian Nat­u­ral Gas Hold­ing Com­pany (EGAS) and the Cyprus Hy­dro­car­bons Com­pany (CHC) Ltd to ex­am­ine tech­ni­cal so­lu­tions for trans­port­ing nat­u­ral gas, through a di­rect marine pipe­line, from the Aphrodite field, op­er­ated by U.S. Noble En­ergy and its Is­raeli part­ners Delek Petroleum and Avner Drilling, to Egypt. “This will op­ti­mise the use of the gas in­fra­struc­ture and achieve an added value for both Cyprus and Egypt. This un­der­tak­ing will be car­ried out in co­op­er­a­tion with con­cerned stake­hold­ers in up­stream and liq­ue­fied nat­u­ral gas (LNG) ac­tiv­i­ties. The aim is to con­clude an agree­ment within six months from the date of the sig­na­ture of this mem­o­ran­dum of un­der­stand­ing,” the an­nounce­ment said.

This MoU is a sig­nif­i­cant step to­wards strength­en­ing co­op­er­a­tion be­tween Egypt and Cyprus in the field of oil and gas, which will fur­ther deepen the friendly re­la­tions be­tween the two coun­tries.

Upon his re­turn home on Mon­day, Lakkotrypis said that Cyprus and Egypt have taken a very im­por­tant step but ex­plained that it takes time to con­clude the agree­ment be­tween the two coun­tries be­cause the terms need to be agreed in de­tail.

He said that this un­der­tak­ing will be car­ried out in co­op­er­a­tion with con­cerned stake­hold­ers in up­stream and liq­ue­fied nat­u­ral gas (LNG) ac­tiv­i­ties. The aim is to con­clude an agree­ment within six months from the date of the sig­na­ture of this MoU.

Cyprus had ini­tially signed an MoU with Noble and its Is­raeli part­ners to con­sider set­ting up a liq­ue­fac­tion plant on the is­land, but the es­ti­mated re­serve quan­ti­ties of about 3.6 tril­lion cu­bic feet would not be suf­fi­cient to jus­tify such an out­put unit. In­stead of a land-based LNG plant, Noble has also pon­dered about a float­ing LNG (FLNG) unit within its li­censed Block 12 of the Cyprus EEZ.

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