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    Cyprus: “On the Verge of Significant Energy Production”



Hydrocarbons in the Eastern Mediterranean could pave the way for peace, prosperity and progress in the Eastern Mediterranean neighborhood, according to Nicos Kouyialis, Minister for Natural Resources and Environment, Cyprus.

by: Drew S. Leifheit

Posted in:

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

Cyprus: “On the Verge of Significant Energy Production”

In his introduction of Nicos Kouyialis, Minister for Natural Resources and Environment, Cyprus, panel moderator John Roberts characterized Cyprus as a country “on the verge of significant energy production," an incredibly apt description, among others, at the 2nd Annual Frankfurt Gas Forum.

“The discoveries of substantial quantities of natural gas open up new perspectives and gives a new impetus to the role the Eastern Mediterranean region can play in the global and European energy markets,” he began. “Our vision is to establish Cyprus as a regional energy hub, utilizing its own indigenous hydrocarbon resources, eventually additional quantities from the neigboring countries,” added Minister Kouyialis.

In order to fulfill this vision, he said the basic objectives of the government of Cyprus were “To exploit its hydrocarbon resources, developing upstream, midstream and downstream infrastructure; to export natural gas primarily in the form of LNG to international and European markets; to meet domestic energy needs and reduce the cost of electricity, thereby promoting growth in sustainable development and enhancing the competitiveness of our economy; to establish a world-class oil and gas industry that will be able to export knowledge; and last, to elevate Cyprus' strategic importance and strengthen further the ties of good neighborliness and cooperation among the countries of the area.”

He said the cornerstone of Cyprus' strategy was the establishment of a natural gas liquefaction plant at the Vasilikos area. Minister Kouyialis explained, “This plant will be onshore Cyprus and will include facilities for the liquefaction of natural gas, the storage and export of LNG.”

The country's plan, he said, took into account the geopolitical concerns of the area. “Being located at the crossroads of three continents – Europe, Africa and Asia – our country could serve as a flexible and secure energy hub for the next decades,” he said, adding that in August Cyprus, Israel and Greece had signed an memorandum of understanding, agreeing to establish a framework for consultation, dialogue, examining the ways and means for the optimum development of natural resources in the eastern basin of the Mediterranean.

He said that Cyprus' plans fit in well with European energy policy towards diversification; moreover, development of Block 12 of the country's Aphrodite field would be significant for the national economy.

Minister Kouyialis also offered some of his own thoughts on the geopolitical situation.

He said, “[Considering] the deep monetary and economic crisis that Cyprus, Greece and, in general, that the European Union is experiencing, the Arab Spring and the turmoil in the surrounding area of Egypt, Syria and Libya, the gas discoveries in the region, which mean be both stablization or destabilization if not well managed, and of course the fact that Cyprus is the outmost strategic for Europe, because it can be the connecting bridge between three continents.”

Of the Arab-Israel conflict, he said there was no signs of it abating, while the nuclear crisis in Iran could be an additional destabilizing factor. While the US and Israel had been the major powers in the area for decades, he noted that the European Union was not active as a major player in the region, but Russia was attempting to make a come-back. Turkey, he said, must also be considered in its attempts to impose itself as an independent energy player.

“With all that in mind, more worrying for me is that the EU is in retreat in the Eastern Mediterranean. The economic crisis in the eurozone has undermined its position and the appeal of the European model,” he said.

“The economic situation in Cyprus should be particularly worrisome for the EU and its fast recovery and growth should be a priority for Europe. I believe a financially healthy Cyprus can be a significant transit route for gas and oil from the Eastern Mediterranean basin, a highly unstable region where the EU's interests intersect with those of several major powers,” explained Minister Kouyialis, summed up the sentiment that hydrocarbons in the Eastern Mediterranean could pave the way for peace, prosperity and progress in the Eastern Mediterranean neighborhood.