Cyprus Energy Minister Giorgos Lakkotrypis has admitted that more natural gas reserves than the ones currently discovered are needed to render an onshore LNG liquefaction plant viable, confirming earlier comments and concerns published by analysts in the Financial Mirror.
Addressing a seminar on energy sufficiency and renewable sources, Lakkotrypis said that the government’s decision to build a land-based natural gas liquefaction terminal would grant flexibility for natural gas exports, bring about economic growth and enable processing natural gas deposits from neighbouring countries.
“However, the fact remains that additional reserves in our EEZ, more than those discovered in block 12, are needed to fund and to sustain the LNG terminal,” he said.
Exploration work carried out by US Noble Energy in block 12 revealed an estimated gross mean resources of 5 trln cubic feet (tcf), which is not considered enough to sustain an LNG plant on its own.
“While we are continuing negotiations with US Noble and its Israeli partners Delek and Avner for the project, we succeeded in expediting the exploration drilling by Italy’s ENI in blocks 2, 3 and 9 by a few months,” he added.
The Italian energy giant is expected to begin exploration activities by the end of this summer.
Noble Energy operates Block 12 with a 70% working interest. Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership each own 15%.
Lakkotrypis also met with ENI’s senior officials in Nicosia discussing the company’s exploration programme in the Cypriot blocks, awarded to a consortium between the Italian energy giant and Korea’s KOGAS.
Cyprus has also granted exploration contracts to French energy giant Total over blocks 10 and 11. Total is expected to begin exploration activity in 2015.
Lakkotrypis said that recent hydrocarbon discoveries offshore Cyprus as well as discoveries in the Levant especially following the events in Ukraine could play a significant role in the security of Europe’s energy supply.
According to Noble Energy, which also has concessions for the development of major Israeli gas fields Leviathan and Tamar, exploration activities offshore Israel and Cyprus has resulted in the discovery of 40 tcf of new gas resources for this region.
He said that according to forecasts by the International Energy Agency, Europe’s dependence on natural gas imports will continue to grow from 45% or its current energy needs to 65% by 2020.
If we exploit these developments correctly, always in collaboration with our neighbouring countries, we will render the region as a key player in the developments concerning energy and particularly in the shaping of EU’s future energy policy beyond 2020, he concluded.
Meanwhile, statements made by US Vice President Joe Biden during his recent visit to the island are seen as vote of confidence to Cyprus and its role in the energy prospects in the region.
The state Cyprus News Agency reported that “the US believe that Cyprus should have a place in any cooperation that may take place in the region on energy issues and, as Biden remarked during a meeting with Cypriot expatriates in the US, no cooperation between Egypt, Israel and Lebanon can take place without Cyprus.”
In this context, the US described the invitation to Cyprus President Nicos Anastasiades to attend President Abdel Fattah Al Sisi’s swearing in ceremony last Sunday as positive, since Egypt is considered as a key country with regard to energy issues.
Moreover, an Israeli high ranking official is expected to visit Cyprus with the aim to yield concrete results and in that context announcements are expected to be made.
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