* Wants Cyprus gov’t to expedite plans at Vassiliko; Chuck Davidson to visit Israel
Noble Energy, operator of the exploration license for natural gas and oil in Block 12 south east of the Cyprus coast, is keen to go ahead with plans to build an onshore liquefaction plant in partnership with the Cyprus government in order to process the output of all offshore gasfields.
Charles Davidson, chairman and CEO of Houston-based Noble, believes that liquid natural gas (LNG) is “the most viable option” to export the fuel, not a pipeline, as the product would reach the liquefaction plant at Vassiliko from where it would be loaded on ships and exported.
Davidson said that his company has asked the Cyprus government to expedite the process by allowing an additional partner to join the venture, similar to a deal already concluded in Israel with Australian operator Woodside, and to proceed with a commercialisation framework for the multi-million terminal.
“A site has already been identified that will be able to accommodate multiple trains” from other license operators, such as Total, ENI and Kogas.
“With the right site and the right port, shipping of LNG can start with benefits to all,” Davidson said, adding that Cyprus has shown greater commitment to such a terminal, rather than Israel, that has yet to identify a location.
Noble determined an initial estimate of 5-8 trln cubic feet of natural gas in the ‘Aphrodite’ Block 12 within the Cyprus Exclusive Economic Zone, adjacent to Israel’s Leviathan gasfield which is believed to hold record amounts of natural gas reserves, estimated at 37 tcf.
Noble has already started production at the nearby Tamar field and considers these three gasfields as its top priorities.
A drilling platform is expected to conclude its work at another Israeli gasfield and will make its way to Aphrodite some time in June to conduct a second appraisal well with the first result some 75 to 90 days after that. Date will then be collected and computed into various models that will take another 60 to 90 days to complete. Thus, a real picture of Cyprus’ natural gas wealth, at least in Block 12, will not be known until October.
In the meantime, Davidson said that data so far has determined that the appraisal well would either confirm reserves at 25% less than the 5 tcf estimate or 25% more than the upper end of 8 tcf.
Whatever the case, Cyprus will not need any more than 1 tcf of natural gas for all its needs, so, the remainder from Block 12, as well as other blocks will be destined for export.
Noble wants to see some sort of cooperation with Israel to jointly utilise the infrastructure, such as the liquefaction terminal at Vassiliko, for which Israeli investors have also shown interest.
“The bigger, the better. Scale is your friend in LNG,” Davidson said, adding that such a terminal would need four years to build, maybe three.
Meanwhile, foreign minister Ioannis Kasoulides, who was in Tel Aviv on Tuesday, said the Cypriot government is continuing talks with Israel on ways to jointly exploit their mineral reserves.
One option is to pipe the gas onshore to Vassiliko, with the pipelines and liquefaction plant expected to be in place by 2019-20 at a cost of about 10 bln euros.
Kasoulides said it remains to be seen whether Israel wants to be part of Cyprus’ energy plans, but that the construction of the plant “will take place anyhow.”
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