Discussions between the Cyprus National Hydrocarbons Company (CNHC) and the Leviathan partners Noble and Energy and Avner have reached a very good point, CNHC said on Tuesday.
Natural gas discoveries so far in the Cyprus' Exclusive Economic Zone, which amount to 5 trillion cubic feet from block 12, cannot render a natural gas liquefaction plant sustainable, a press conference has heard, and consequently Nicosia has embarked on talks with Noble-Avner over the possibility of transferring Leviathan gas to Cyprus, which would sustain the operation of an LNG plant.
“We went a long way in the past three meetings we have had,” CNHC Board member Lenas Milonas told the press conference today, adding that negotiations on a possible agreement are close to conclusion.
He added that although the Leviathan partners have already agreed on exporting 20% of the block`s reserves to Egypt, the Israeli block has ample of reserves that could be transferred to Cyprus for liquefaction. Leviathan is Noble`s “largest exploration success” with a gross mean of 19 tcf.
Toulla Onoufriou, the CNHC Chairwoman, noted however that the next 6 to 12 months will be crucial for Cyprus` future in the field of energy, as the exploration programme by Italian- Korean consortium ENI-KOGAS will determine whether an LNG plant would be sustainable solely with Cypriot natural gas resources.
ENI/KOGAS has been granted exploration licence for the Cypriot blocks 2,3 and 9 and it will carry out four exploration drillings starting in September.
“We will have significant developments, namely data that would allow us to take important decisions,” Onoufriou said.
Furthermore, the French TOTAL will begin its exploration programme on blocks 10 and 11 in the second half of 2015, while Noble energy will carry out an additional drilling.
Onoufriou said that although the construction of an LNG plant is the main goal, the Company has prepared several scenarios in case Cyprus' gas reserves cannot sustain the LNG terminal, including export to Egypt, or floating facilities to transfer natural gas from the rigs to Cyprus.
“Our primary goal is to construct an LNG plant but should we have additional resources, a combination of land-based and floating liquefaction facilities would be an appropriate option,” Onoufriou noted.
