Page 11 - Euroil Week 45 2019

EurOil POLICY EurOil
Cyprus awards first production licence
CYPRUS
Development has been stymied by a maritime dispute with Turkey.
CYPRUS has granted its first oil and gas produc- tion licence to a Royal Dutch Shell-led interna- tional consortium, as it aspires to establish itself as one of the Mediterranean’s key gas exporters.
A 25-year licence for the Aphrodite field, Cyprus’ largest offshore discovery with an esti- mated 4.1tn cubic feet (116bn cubic metres) of gas, was awarded to Shell, Texas-based Noble Energy and Israel’s Delek Group, the govern- ment said in a statement.
Development plans call for the construction of a subsea pipeline that will carry the field’s gas to Shell’s 7.2 bcm per year LNG terminal in Idku, Egypt, with Cypriot Energy Minister Yiorgos Lakkotrypis predicting production to start in 2025.
“Cyprus will thus become a producer and alternative source of EU gas supplies, while at the same time making yet another decisive step towards realising the common vision of the countries of our region for the creation of the Eastern Mediterranean Gas Corridor to Europe,” Lakkotrypis said.
Cypriot authorities expect the project to generate €9.3bn ($10.3bn) in earnings over an 18-year period.
Aphrodite was discovered in 2011, leading to a flurry of exploration activity in Cyprus’
exclusive economic zone (EEZ). These efforts have yielded results, with Italy’s Eni and France’s Total discovering the Calypso discovery last year, estimated to hold up to 227 bcm of gas. This was followed by the similarly sized Glaucus-1 find by ExxonMobil and Qatar Petroleum in February.
But development has been stymied by a mar- itime dispute between Cyprus and Turkey, with the government in Ankara conducting its own exploration in what are internationally recog- nised as Cypriot waters.
Cyprus has recently hired a Chinese-led con- sortium to supply a floating storage and regasifi- cation unit (FSRU) to import LNG itself, as part of plans to cut back on the use of heavy fuel oil and diesel supplies for its energy. There is also a plan afoot to build a 10 bcm per year pipeline that would supply Cyprus, Greece, Italy and other European markets with gas from offshore Israeli fields.
Israel Natural Gas Lines reported this month signing a memorandum with IGI Poseidon to study the EastMed pipeline project, as it is known. The pipeline could in the future pump Cypriot gas to Europe as well, depending on whether the developers of the country’s other gas finds decide to export gas in the form of LNG instead. ™
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