Cyprus gas export income to flow by 2019

Cyprus should generate foreign income from the export of natural gas by 2019, trade and industry minister Neoclis Sylikiotis said on Friday, which is too far in the future to help the island overcome financial problems caused by its stricken banking sector.
The minister said the vast reserves of natural gas discovered in the waters between Cyprus and Israel should be developed for domestic use in 2017 and provide export revenue from 2019 or 2020.
"Commercial exploitation will begin in 2019," Sylikiotis said, explaining that it would require large-scale investment in liquefied natural gas (LNG) plants offshore.
"We expect important export income to flow from 2019-2020," he told Brussels-based journalists during briefings in Nicosia to launch the Cyprus's six-month presidency of the European Union.
Cyprus, which reported the natural gas discovery last December, took another step towards its exploitation in May when it received 15 bids from international companies to develop nine offshore blocks.
Among the bidders are Italy's ENI, France's Total , Malaysia's Petronas and Russia's Novatek.
Surveys suggest more than 100 trln cubic feet (2.831 trln cubic metres) of reserves lie untapped in the eastern Mediterranean basin between Cyprus and Israel – almost equal to the world's total annual consumption of natural gas.
While that has sparked major commercial interest, it has also raised political concerns. Turkey is now exploring for gas off the occupied northern coast, and Russia, a financial backer of Cyprus, is keen to expand its footprint in the region.
Turkey has threatened to block international oil firms from bidding on Turkish energy projects if they also take part in Cyprus offshore energy ventures.
Moscow remains keen to develop its energy footprint in Europe, including pipelines for its own gas, and is close to Syria, which continues to receive Russian arms, including shipments that Western diplomats believe have passed via Cyprus.
Lebanon, whose territorial waters neighbour those of Cyprus and Israel, is also concerned about protecting its potential to explore for resources in the region.
The problem for Cyprus is not just keeping its neighbours happy but also finding a way to bring the project to commercial viability as soon as possible so that it can generate income. It must also find the capital to invest in costly infrastructure, such as LNG storage plants.
Finance Minister Vassos Shiarly sidestepped suggestions that revenue from the gas fields could extract Cyprus from the financial hole created by liquidity problems in its banking sector, saying there was immediate work to be done and the island could not rely on as-yet unrealised income.