Natgas exploration to go ahead, says Minister

Exploration plans by oil and gas majors Total and ENI will go ahead as palnned, with the French company expected to start drilling in July and the Italians by the end of the year or early 2018, Energy Minister Yiorgos Lakkotrypis told a closed-door meeting of the House Energy and Trade committee.

He said that the government is determined to exercise its sovereign rights in its Exclusive Economic Zone and to proceed with its energy planning, and that the same determination is shared by the companies that have agreements with the Republic.

Lakkotrypis also told MPs that the Natural Gas Public Company (DEFA)’s study on how to introduce liquefied natural gas to Cyprus will soon be presented to the cabinet and tenders will open, while five prospective locations have been identified for an on-land liquefaction plant near Vassilikos.

Lakkotrypis said that he informed MPs on developments in exploration drilling as regards the third licensing round, efforts to come to an agreement on the exploitation of the Aphrodite reserves towards Egypt, and Turkey’s latest provocations in the Cypriot EEZ and how they affect the Republic’s energy plans.

Asked how the Turkish provocations in the EEZ affect the energy planning, Lakkotrypis said “they do not”, adding that Turkey continually provokes us “but we will continue to do nothing more or less than exercise our sovereign rights”.

He said that ENI will go ahead with three-dimensional seismic surveys and expect the drilling to take place by end of 2017 or beginning of 2018.

Lakkotropis added that, apart from the technical and economic challenges that the hydrocarbons sector faces, there is also the dimension of the big differences that exist in the eastern Mediterranean.

The Minister of Commerce said the government will continue to handle the situation by building closer relations with its neighbours and in mid-June President Anasyasiades will visit Lebanon.

Regarding the construction of a terminal, the Minister of Commerce said that he informed the Energy Committee that “top priority is a liquefaction terminal and for that purpose a land survey study has been prepared in Vassilikos”.

He said President Anastasiades was informed on the study conducted by DEFA which had indicated that we must proceed with natural gas supply to Cyprus by 2020 and a proposal will soon be presented to the cabinet to issue two tenders, one for the necessary natural gas infrastructure and the other for the supply of natural gas itself. Lakkotrypis said perhaps a further 18 months might be required for the terminal to be completed.

He explained that this would be a floating regasification unit, which will allow Cyprus to introduce the necessary quantities of natural gas for power generation. He further clarified that such plants are located near power stations, receiving liquefied natural gas vessels and regasifying them to generate power.