Ministers sign MOU for import of Egyptian LNG
Egypt and Cyprus have signed a memorandum of understanding (MOU) covering the export of liquefied natural gas (LNG) to Cyprus and cooperation in the field of oil and gas exploration and distribution.
Egypt’s Oil Minister, Sameh Fahmy, who signed the MOU with Commerce and Industry Minister George Lillikas in Nicosia last week, said the MOU includes exchange of information, study of the possibility of developing joint offshore areas, seismic surveys and participation of Egyptian oil companies in exploration activities.
The Minister added that Egypt will also cooperate with Cyprus in building a gas distribution network for domestic and industrial use and in converting power plants to use gas instead of fuel oil.
The two sides also discussed the possibility for Egyptian companies to build a petroleum products terminal to store Euro-specification products, in line with the new EU regulations to restructure energy markets.
Cyprus also expressed an interest in benefitting from Egypt’s experience in deep sea oil and gas exploration.
Fahmy stated, “Cyprus has a very good chance to find oil and gas and we are not going to end this cooperation unless we make sure that Cyprus will enjoy the use of its oil and gas, offshore and onshore.”
Lillikas did not give any details about the MOU. He sufficed to say that Cyprus would be in a position to announce developments on joint oil and gas exploration with Egypt at a later stage.
“Things have been set in motion and we hope that in the next several months there will be developments,” he said.
The MOU did not indicate how much LNG Egypt would export to Cyprus and when it could start.
Two years ago the Cyprus government reviewed its options for gas imports and opted for LNG by tanker to a hub near the EAC’s Vassiliko power plant, rather than by subsea pipeline from the Syrian coast, where Egyptian gas is expected to be available in the next two to three years via the Arab Gas Pipeline (AGP). Plans were then discussed to create a regasification plant and storage facilities at Vassiliko.
Egypt and Cyprus have previously discussed cooperation in the development of Cyprus’ oil and gas potential resources, the energy-specialist MEES Report said.
In February 2003, the two countries signed an agreement delineating the middle line — the mean distance between the coastlines of the two countries — as the basis for establishing an exclusive economic zone between them. The agreement was based on the Law of the Sea of 1982.
Assuming the line agreed with Egypt is accepted by other countries in the area (Syria, Lebanon, Libya, Greece, Turkey, Israel and the Palestinian Authority), Cyprus’ exclusive zone will contain a marine area of some 97,249 sq. kms., according to Lillikas’ predecessor, former Trade minister Nicos Rolandis, who had previously discussed with Egypt the possibility of joint exploitation of oil resources in the Mediterranean.
