A little-known Limassol-based investor group is planning to strike it rich in the Eastern Mediterranean natural gas industry by unlocking hundreds of billions of dollars of sales mired in the complexities of the region.
Cynergy Group is looking to spend between $5 bln and $10 bln in the coming years buying under-utilized natural gas assets in the region, CEO Mike Germanos told Bloomberg.
He said the company is in talks with “some of the most respected global family offices, private equity firms and sovereign funds” about raising the cash.
Germanos declined to give the names of his associates or the assets he’s targeting, citing the sensitive nature of the period before Cynergy provides a formal offer.
He said the firm is in the final stages of putting its bid together, which it will reveal by mid-June.
Significant quantities of natural gas have been found off the coasts of Egypt, Israel and Cyprus over the past decade, which has united regional governments in the hope of developing an energy hub in the East Med.
Companies have struggled to overcome longstanding political and legal hurdles to find viable export markets.
Cynergy is looking to tap the region’s full potential by recruiting industry experts and political operators.
While countries are pushing for collaboration, friction between the various firms involved in the East Med, which sometimes have competing interests, has bogged down the industry, Germanos said.
He said major companies seek to maximize their own investments, whereas Cynergy “is the only one that put the team, the backers and the plan needed to create the vehicle that could launch a series of transaction and see this through”.
Bloomberg said underused or idle assets in the region that Germanos may be targeting are the Idku and Damietta LNG plants in Egypt, Leviathan reservoir in Israel, Aphrodite and Glafcos-1 fields in Cyprus.
Cynergy has “approached and is further approaching” companies with “major stakes across the East Med,” Germanos said.
The structure of his offer will “not be so different” from Woodside Petroleum’s aborted bid to be a major shareholder in the Leviathan field, or how Greece’s Energean Oil & Gas financed its acquisition of Israeli gas fields, he said.
Energean raised about $1.8 billion through an initial public offering and bank loans to develop the Karish and Tanin reservoirs.
Bloomberg said the price that Cynergy may have to pay for these assets could be a deterrent.
Leviathan alone is valued at $11 bln, according to Noam Pincu, an analyst who covers Israel’s gas industry at the country’s largest investment house.
“I don’t see any scenario in which Delek and Noble sell the whole thing,” he said. “It’s a great asset that gives them international recognition, they spent years developing it, and now they want to see the fruits of that labour.”
Germanos said the companies developing Leviathan have inked $25 bln in contracts since the field was discovered in 2010, but still have more than 80% of the reservoir untied to any buyers.
“The region needs a maverick approach,” Germanos said. (source Bloomberg)
ALSO READ: http://www.financialmirror.com/news-details.php?nid=36910
