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    Eni Interested in Cyprus LNG Project

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Summary

The President of Cyprus met with Eni’s CEO, Paolo Scaroni to discuss Eni’s ongoing activities offshore Cyprus and Eni’s future involvement in hydrocarbon activities in Cyprus.

by: Karen Ayat

Posted in:

Natural Gas & LNG News, News By Country, , Cyprus, Liquefied Natural Gas (LNG), Top Stories

Eni Interested in Cyprus LNG Project

The President of the Republic of Cyprus, Nicos Anastasiades, and Eni’s CEO, Paolo Scaroni, met on the 11th July in Nicosia, Cyprus, to discuss Eni’s ongoing activities offshore the island and the company’s future involvement in hydrocarbon activities in Cyprus. Scaroni and the company’s COO Claudio Descalzi updated the president of Cyprus on Eni’s exploration plans in the country[1].

Eni has an 80% participating interest in Blocks 2, 3 and 9 located in the Cypriot deep offshore portion of the Levantine basin. The other partner in the Blocks is the Korean company KOGAS with a 20% participating interest.

Cyprus reported its first offshore natural gas find in 2011. It is currently planning to build a multibillion euro LNG facility in Vassilikos. ENI could be interested in participating in the LNG project if its explorations prove successful. The company’s exploratory drilling is scheduled for the second half of 2014.

Charles Ellinas, CEO of the Cyprus National Hydrocarbon Company (CNHC) said that the LNG project will consist of at least 3 liquefied natural gas production lines (or ‘trains’ as it is commonly referred to in the industry). Ellinas said that the coastal site that will be home to the LNG facility can accommodate up to 8 trains for Cyprus to welcome and process the gas from neighboring Lebanon and Israel.

Earlier this month, Cyprus signed a framework agreement to negotiate the construction of an LNG terminal in Vassilikos Cyprus with US-based Noble Energy and Israel’s Delek and Avner. Noble has 70% working interest in the Aphrodite field offshore Cyprus. In late 2011, Noble announced the discovery of the Aphrodite field in Block 12 of offshore Cyprus with a gross mean of 7 tcf. Noble is expected to announce the results of the appraisal drilling in September 2013. Noble told Natural Gas Europe that if the quantities expected are confirmed, one approach for the commercialization of Block 12 natural gas production would be to construct an LNG facility on land identified by the Republic of Cyprus in Vasilikos, where space is available for at least three LNG trains.

Neighboring Israel has not yet found a coastal site to build its own LNG facility and could use Cyprus’ processing facility. Noble has just announced the Karish discovery offshore Israel. It is the fifth of its kind with an estimated gross mean resource size of around 1.8 Tcf. With the addition of Karish and the recent increase in resource estimates at Tamar and Leviathan, the total discovered gross mean resources in the Levant Basin by Noble are now estimated to be approximately 38 Tcf.

Lebanon is currently finalising the pieces of legislation that will allow the launching of the exploration phase and without which contracts can not be awarded. Despite the lack of the formation of a new government, caretaker minister of water and energy Gebran Bassil urged the caretaker government to take the necessary measures that will allow Lebanon to stick to its schedule and start exploration by 2014.

While gas-rich Israel is facing multiple obstacles as it tries to find adequate export routes and markets, Lebanon, behind in the race, has not yet formulated its export policy. Debt-crippled Cyprus might attract its Eastern Mediterranean neighbors and realise its ambition of becoming a regional energy hub.

Karen Ayat is an analyst focused on energy geopolitics in the Eastern Mediterranean.

Follow Karen on Twitter: @karenayat



[1] ENI’s press release can be accessed here http://www.eni.com/en_IT/attachments/media/press-release/2013/07/cs-cipro-eng.pdf