US Noble’s Energy Chairman Charles Davidson said on Tuesday the Houston based company is looking for a partner in developing a natural gas field in block 12 in Cyprus’ Exclusive Economic Zone.
In a press conference in Nicosia, Davidson said that Noble has given the Cypriot government the names of the prospective investors for the gas field which exploratory drilling conducted in 2011 revealed a reservoir between 5 and 8 trillion cubic feet (tcf) with a gross mean of 7 tcf.
“We have asked for a permission (from the Cypriot government) to potentially secure an additional partner in the project similar to what we are doing with export project in Leviathan in Israel,” he said.
Noble which also has concession for several Israeli natural gas prospects, concluded to an agreement with Woodside Energy which will acquire 30% working interest in Leviathan.
Davidson refrained from elaborating on the names of the companies interested in investing in Cyprus` block 12
“We have heard from some that they are interested and we have provided those names to the government and are expecting that shortly (they will) approve our ability to present them with information so that we can get a firm proposal” he said.
Davidson said the appraisal well in block 12 will take place in June, immediately after the drilling work in Israel’s Karish prospect concludes so that the rig will be transferred to Cyprus.
Responding to a question, Davidson said that according to Noble’s models “there is a 25% probability it (the reservoir) could be either below the five (tcf) or a 25% probability that it will above the eight tcf.”
He noted however that if the reservoir turns out to be lower than the base estimation, that is 5 tcf “there is a possibility” to put the development of the field on hold.
Davidson noted however that “we like the range we are in.”
“The key is to see if we can narrow that range and see that that range is going to be adequate to support the project,” he said.
Asked if Noble’s Israeli partners were made an offer to export gas via pipelines to Turkey would that impact the decision for an LNG terminal to Cyprus, Davidson said “our view is that LNG is the best outlook and the best method for moving this to market.”
He cautioned that if some parts of the natural gas reservoir are removed from the project it may be not viable, noting that the best option for Liquefied Natural Gas (LNG) is the best option for export.
“We believe that once you go to export outside the domestic market then LNG is the most viable option. There are other options of course but so far it has been the most viable option,” he said. Invited to comment that Noble Cyprus’ John Tomich said last year that block 12 may carry potentially more natural gas that 7 tcf, Davidson said “we are of the view that there are other possible exploration opportunities on the block besides the discovery we have made.”
“In my opinion as I looked at those they are more risky, they have less chance of success but there are prospects and so one of the things that we will be looking at in the future is not only appraisal work but further exploration. So that is absolutely the case but they are undiscovered resources but we believe that a discovered source has the highest value,” he went on to say. On Cyprus’ potential natural gas needs for electricity generation, Davidson said that one tcf will meet the island’s domestic demand “for some time”, but did not elaborate.
Furthermore, Davidson called on the Cypriot authorities to move expeditiously on plans to construct a Natural Liquefaction Terminal (LNG plant). He noted that from the moment a decision is taken on an LNG terminal the project will take four years. “It is important to start now because the timeframe for LNG projects are very long so it is important to start right away,” he said.
He also advocated for an LNG terminal in Cyprus as the island granted exploration licenses to consortium ENI/KOGAS for blocks 2, 3 and 9 and with French giant TOTAL on blocks 10 and 11.
“Cyprus now is on the verge of having additional companies explore and they will need a market outlet as well so part of the framework is flexibility so that other who are exploring here as they have discoveries will have access to that market as well,” he went on to say.
Davidson added that before the completion of the LNG terminal will build a pipeline from block 12 to the facility where the liquefaction will take place so probably we can shave a year of that for domestic deliveries.
Asked whether Noble has any preference on the location of the LNG Terminal, as Israel intends to export LNG, Davidson expressed hope that “in the end there will some joint cooperation between Cyprus and Israel.”
He noted that Cyprus has already identified a site where the LNG terminal will be constructed whereas Israel is in the process of doing so.
“So in the end I hope there is cooperation but in our view we want to see all these developments because they are huge.”
According to Noble, natural gas reservoirs in the Cyprus’ block 12 and the Israeli blocks reach 37 tcf.
