Building a natural gas pipeline from Israel to Cyprus could be revived if Energean’s recent gas discovery in Israeli waters proves to be as fruitful as initial estimates.
In comments to the Cyprus News Agency, Charles Ellinas, a Senior Fellow at the Global Energy Centre, Atlantic Council, said the discovery by Greek oil and gas firm Energean in Israel’s Athena gas field has bolstered belief in the area’s potential.
Ellinas noted that the 8 billion cubic metres discovered are very small, as the company expected to find more than 20 billion.
He said the Cypriot gas field Aphrodite has 116 billion cubic metres of natural gas.
“This does not help Energean move forward with export projects.
“However, the company has said that the “Olympus Area” may hold more than 50 billion cubic metres of natural gas based on their latest calculations.
“Energean is saying it will continue drilling. They are confident of finding more natural gas deposits, allowing them to proceed with new projects, including the possibility of exporting to Cyprus.”
At the tripartite meeting of energy ministers from Greece, Cyprus, and Israel in April, Energean proposed to bring to Cyprus a mobile liquefaction unit, the Hilli Episeyo FLNG, owned by the Norwegian company Golar LNG, currently located in Cameroon.
The unit is contracted until 2026, with Energean proposing to station it at Vasiliko, where it will liquefy and export quantities of natural gas coming to Cyprus via a pipeline from Israel.
“I think that the project has good chances of going ahead because apart from the fact that its partner is Golar, the team also includes Vitol, the owner of VTTI tanks in Vasiliko,” said Ellinas.
Vitol is the largest oil and gas trading company globally and is interested in buying all the LNG produced by the Hilli Episeyo FLNG.
Cyprus, as Ellinas said, can be supplied with gas directly from the pipeline that will be created at the cost of around $6-7 per thousand cubic feet.
Energean has said that if Cyprus is interested in importing gas via the pipeline, this could be built within two years at the cost of up to $ 1.5 bln, financed by the companies participating in the consortium.
Ellinas appeared confident that the project will go ahead if the quantities required are discovered: “The quantities will be available, the liquefaction plant will be there, and buyers are ready”.
Referring to the Aphrodite gas field in Cyprus’ EEZ, Ellinas believes the chances of it being exploited are smaller since the negotiations with Chevron have not yet been concluded, while the results of the first quarter issued by the US company do not refer to investments in Cyprus.
They do, however, refer to Israel, where Chevron is active in the Tamar and Leviathan gas fields.
“It is more likely they will step up exports from Israel to Egypt, where the gas is liquefied.
“At the same time, natural gas exports from Egypt are expected to triple this year.”