Natural Gas Security Concerns in Cyprus
The element of security preparation concerning the proposed LNG infrastructure and offshore gas installations in Cyprus emerges following thorough research by distinguished speakers at the 2nd Cyprus Natural Gas Conference.
More specifically, George Pelagias, DG of the European Rim Policy and Investment Council, spoke on the need for Cyprus and the companies involved in the establishment of an LNG terminal and hub in the Vassilikos region to invest in project security. Potential terrorist attacks are a major concern, citing Turkey as an example, which witnessed 59 attacks of such nature in its energy infrastructure over the past few years.
According to Pelagias, another concern is the cyber warfare that is already becoming a hot global issue due to the numerous attempts of hackers that target software systems of large corporations and the SCADA systems of power plants and other industrial complexes. Organized crime and extremist groups are another peril to be looked upon, since the Vassilikos hub would be the most valuable target in the Island and could become a security concern. As such, regional cooperation is certainly needed to overcome such dangers.
In the same spirit, S. Daniel Abraham Center for Strategic Dialogue of Israel president Ephraim Sneh spoke about practical safety operational concerns. Cyprus should be able to identify and control, if needed, every vessel approaching the sea region of Vassilikos, and at the same time permanently exclude any flight surrounding its airspace.
Snech believes that the installation perimeters should be equipped with the latest monitoring and surveillance devices and that cooperation between stakeholders, specifically Cyprus and Israel, is of paramount importance.
The cost of a thorough security system in Vassilikos could be as much as €80 million, excluding other expenses, such as policing, a Coast Guard and military preparedness. A Vassilikos defense force is needed, concluded Snech, which could be in part or fully paid by the companies involved since the Cypriot state has already witnessed a downturn in its economy and could need financial assistance in that sector.
Project Update
The Vassilikos project appears to be on track as Noble Energy country manager John Tomich recently announced the company is about to sign a memorandum of understanding with Nicosia regarding the Vassilikos terminal. Also after 38 months from the Final Investment Decision (FID) natural gas will be produced from Block 12 and 48 months after the FID Vasilko terminal should be ready. Tomich relayed that the process is two-fold, first to guarantee the secure of the Island's electricity needs, and the design of an export route.
Regarding the second drill to take place in Block 12 later on this year, Noble Energy is confident that despite some technical difficulties it will commence soon. Overall Tomich assured that the Cyprus gas project is designed to be fully operational and functional as the previous project taken up by his Company, such as the neighboring Tamar in the Israeli Exclusive Economic Zone.
In the meantime, Tel Aviv is expected to reach its decision regarding the export routes of its own reserves and that will be inexorably related to the Vassilikos terminal if Israel decides to go on its own, the Cyprus installation should be established at a lower scale than initially expected.