Nicosia yesterday announced an agreement with French oil giant Total to develop a plant at Vasilikos to liquefy natural gas.
But the pact is non-binding and depends on Total’s discovering gas in areas offshore Cyprus that it is now exploring.
An official announcement said: “The Republic of Cyprus signed a Memorandum of Understanding in respect of the Cyprus Liquefied Natural Gas Project with Total.”
This follows the award in February to Total of Exploration and Production Sharing Contracts for Blocks 10 and 11 in Cyprus’ Exclusive Economic Zone.
“The MoU records the support of Total for the monetisation of potential natural gas reserves in Blocks 10 and 11 of Cyprus’ EEZ through a variety of options giving priority to liquefaction and LNG export to European and Asian markets,” the joint statement said.
Both parties will co-operate on the feasibility of an onshore LNG plant to be built at Vasilikos, Limassol, with due consideration to Total’s views on the structuring and development of the LNG Project.
Cyprus is beginning the design work for the LNG plant with Houston-based Noble Energy – the first to explore the island’s offshore natural gas – helping with that effort.
Nonetheless, Energy Minister George Lakkotrypis said in an interview in London this week that Total would probably be in charge. “Only the likes of Total can be the operator,” he was quoted saying.
Lakkotrypis also said that construction would employ about 4,000 people — enough to make at least a small dent in the 75,000 unemployed.
Cyprus is already on its way to becoming a regional hub for the energy industry, he added.
Noble, who has Israeli partners, believes there is more to find in its own exploration block and in others.
In October it was announced that gas reserves off Cyprus are nearly a third less than initially estimated but remain “substantial”.
Test data from a confirmation drill by Noble Energy showed the natural gas discovery in Block 12 ranges from 3.6 trillion cubic feet to 6 tcf with a mean of 5 tcf, falling short of a Noble estimate in 2011 of 5-8 tcf, with a mean of 7 tcf.
Lakkotrypis insisted, however, that the assessment “confirms there are substantial deposits of natural gas with significant possibilities of production”.
Finding more gas would take time, though.
There have been hopes that Israeli gas from Leviathan field might go to Vasilikos plant.
But talks on the subject have yet to produce an agreement, and Israel has many options — including building its own LNG facilities and sending gas by pipeline to its neighbours.
Cyprus, which seeks to rebuild its ailing economy, has also licensed Italian energy company Eni and South Korea’s Kogas to search for offshore gas.
Source: The Cyprus Daily