Noble Energy said on Tuesday it has submitted a proposal to provide natural gas from Cyprus` offshore block 12 for power generation purposes.
The government has been exploring the possibility of natural gas import for power generation as an interim solution until an LNG terminal is constructed to meet domestic energy consumption and gas exports. An appraisal well carried out by Noble Energy, which has the license for block 12, showed a gross resource range ranging from 3.6 trillion cubic feet (tcf) to 6 tcf with a mean of 5 tcf. However, natural gas production from block 12, including on shore and off shore installations, will begin 48 months from the Final Investment Decision expected in 2016.
Keith Elliot, Noble`s Senior Vice President, Eastern Mediterranean, told a press briefing in Nicosia the company has submitted to the Cypriot government a proposal on the relocation of a spar rig from its operations in the Gulf of Mexico to block 12, and the construction of a pipeline linking the reservoir with the Vasilicos power plant, a project with a total cost in excess of 1 billion dollars. The project could be completed by 2016 provided that a final decision is taken by the government by the end of this year.
"We continue to work with the government to decide whether there is an opportunity and whether there is a valid case for an economic development there. But I would characterize it as something we identified as an opportunity that we put forward for discussion," he added.
Elliot described the outcome recent appraisal well as a success, noting that the results were within the range of the original forecasts announced back in 2011 when the exploratory drilling was carried out.
"We further potential in block 12. This is a very high quality reservoir. The deliverability of the well is significant," he said.
Elliot noted that Noble is currently evaluating the block-wide 3D seismic survey data to determine whether the company will proceed with an additional appraisal well or with an exploratory drilling by the later part of 2014.
Replying to a question, Elliot said it is too early to say whether Noble will proceed with an additional appraisal well. On October 3 Noble Cyprus` John Tomich said the company discovered "a half a dozen" additional reserves in block 12.
Furthermore, Elliot said the company is working in conjunction with the Cypriot government on the construction of a Liquefied Natural Gas terminal (NLG terminal) at Vasilicos, on the southern coast.
The Cypriot government and Noble have signed a Memorandum of Understanding for potential LNG project.
"We certainly think that this is an appropriate forward for monetizing this resource, it isn`t the only way forward but it certainly is the appropriate way forward. And we continue to be very encouraged about the resource base for the area", he said.
He confirmed that Noble is speaking with a strategic partner that would join Noble in block 12. "We are speaking to other parties about partnership in joining the block," he said without elaborating, noting that this has always been Noble Policy.
Noble Energy operates Block 12 with a 70 percent working interest. Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership each own 15 percent.
Get all the latest news and videos in your inbox. Register FREE