Energean seeks help from Cypriot politicians in Israeli gas supply bid

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Greek oil and gas producer Energean seeks to convince Cypriot parliamentary party leaders to pressure the government into accepting its proposal to sell its Israeli gas to Cyprus.

In a statement on Tuesday, Energean said it had requested a meeting with Cypriot political leaders to “inform them of our proposal to import natural gas to Cyprus through a pipeline from Israel”.

It said letters have already been to the parliamentary parties and Energean is waiting for meetings to be arranged.

Energean proposes to import natural gas to Cyprus via pipeline from its Karish North field, where 25 billion cubic metres of natural gas has been identified.

The Cyprus market is expected to initially require 0.5 to 0.6 bcm per year. The pipeline will be about 200km long and carry gas from Karish North in Israel.

The investment undertaken by Energean and its partners will cost some $350 mln.

Energean that its proposal creates competition in the domestic gas market and has the potential to bring gas to Cyprus in the shortest possible time (2021), at the most competitive prices.

“It removes the isolation of Cyprus from the other energy markets of the wider region and strengthens cooperation between Cyprus and Israel,” said Energean.

“It contributes substantially to security of supply, as it provides a second source, and strengthens the country’s geopolitical position,” it added.

A request to meet Cypriot politicians to push its gas supply agenda follows Energean submitting applications to the Cyprus Energy Regulatory Authority for licenses to supply natural gas to wholesale customers and construction a terminal on the island.

The company is registered with the London and Tel Aviv stock markets.

Despite Nicosia selecting a Chinese-led consortium to build its first LNG infrastructure while also looking for suppliers, Energean argues there is room for others in the local market.

“Our plan does not contradict the plans of the Republic of Cyprus. When you want to create a market, you don’t close the doors to competition. You use it to become better, cheaper and more efficient,” Energean’s Constantinos Nicolaou told a Nicosia energy symposium this month.

The €290 mln LNG import project is co-financed by a grant of 40%, or up to €101 mln from the European Union’s “Connecting Europe Facility”. The LNG terminal at Vassiliko is scheduled for completion in 2021, early 2022.

The LNG import terminal includes a floating storage regasification unit (FSRU), a jetty for the mooring of the FSRU, jetty-borne and onshore pipelines, as well as additional facilities.

Although Nicosia has previously rebuffed Energean’s “unsolicited offer”, the Greek firm insists it can deliver quicker than the FSRU project while competition should be allowed for the benefit of the end-user.

Even if the figures add up financially, the government is reluctant to abandon its plan as it doesn’t want to be dependent on a single supplier and forsake the construction of an LNG terminal.