Con­sor­tium says Cyprus off­shore gas re­serves are now com­mer­cially vi­able

The China Post - - BUSINESS -

Cyprus an­nounced on Sun­day that off­shore re­serves in its Aphrodite gas field have been pro­nounced com­mer­cially ex­ploitable, the first such devel­op­ment in four years of en­ergy ex­plo­ration.

U.S. firm Noble En­ergy made the first find off the southeast coast in 2011 in the Aphrodite field (Block 12), which is es­ti­mated to con­tain around 127.4 bil­lion cu­bic me­tres (4.54 tril­lion cu­bic feet) of gas. Is­raeli firms Delek and Avner have a 30 per­cent stake in the ven­ture.

“Noble En­ergy In­ter­na­tional, Delek Drilling and Avner Oil Ex­plo­ration, hold­ers of a li­cence for the ex­plo­ration of hy­dro­car­bons in Block 12 of Cyprus’s Ex­clu­sive Eco­nomic Zone (EEZ), have de­clared com­mer­cial­ity of Aphrodite,” the en­ergy min­istry said in a state­ment.

It said the ven­ture will now sub­mit a devel­op­ment and pro­duc­tion plan to the gov­ern­ment cov­er­ing method and timeline for ex­trac­tion and sales. It is sub­ject to cabi­net ap­proval.

The min­istry hailed a “sig­nif­i­cant mile­stone to Cyprus’s tran­si­tion from the hy­dro­car­bons ex­plo­ration phase to that of ex­ploita­tion.”

“It is an­other im­por­tant step to­wards the mon­eti­sa­tion of the coun­try’s in­dige­nous nat­u­ral gas re­serves, both for do­mes­tic elec­tric­ity gen­er­a­tion... as well as ex- ports via di­rect sub­sea pipe­lines to neigh­bour­ing coun­tries.”

The an­nounce­ment comes af­ter Ital­ian-South Korean en­ergy con­sor­tium Eni-Kogas said in March it had failed to dis­cover any ex­ploitable gas re­serves in deep-sea drilling off the Mediter­ranean is­land.

In Jan­uary, French en­ergy gi­ant To­tal said it had failed to lo­cate any tar­gets to test-drill in the blocks it is li­censed to ex­ploit.

Both Kogas and To­tal have gone back to the drawing board with no sig­nif­i­cant move on Cyprus ex­pected within the next two years.

Cyprus needs to find more gas re­serves to make a planned on­shore ter­mi­nal fi­nan­cially vi­able as it seeks to be­come a re­gional en­ergy player.

It had planned to build a liq­ue­fied nat­u­ral gas plant that would al­low ex­ports by ship to Asia and Europe, but the re­serves con­firmed so far are in­suf­fi­cient to make that fea­si­ble.

Cyprus and en­ergy- starved Egypt are look­ing into the pos­si­bil­ity of trans­fer­ring gas from the Aphrodite field to Egypt via an un­der­sea pipe­line. Cyprus hopes to begin ex­port­ing gas, and maybe oil, by 2022.

Cyprus’s search for en­ergy has caused fric­tion with Turkey, which does not recog­nise the is­land’s EEZ and wants to see the process put on hold un­til there is a set­tle­ment of the is­land’s decades-old di­vi­sion.

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