Turkey continues to remain a potential market for gas discovered in Aphrodite field in bloc 12 of South Cyprus’ EEZ.
Since the South abandoned its plans to build an LNG terminal at Vasilikos because it was economically unviable, Noble consortium, which leased bloc 12 is left with two options, writes George Telaveris in ‘Cyprus Weekly’.
Either Noble employs the latest technology and uses an offshore LNG plant to process the gas, in situ or it pipes gas to Turkey, if there is a solution to the Cyprus problem.
The Noble – BG consortium, which also holds a 36% stake in Israel’s Tamar gas field is currently in talks with companies and officials in Turkey as it also interested in selling gas to Turkey from its gas fields offshore Israel.
Forging a deal will depend on rapprochement between Israel and Turkey. However, most of the issues between the two countries have been cleared up, Israeli energy minister Yuval Steinitz recently said.
Energy business consultant Charles Ellinas notes, however, that it will require an investment of $6-8 billion at a time when globally, oil and gas companies are cutting their costs, as low gas prices dictate.
The South’s government is reviewing the draft gas field development plan for the Aphrodite field in Bloc 12 from Noble Energy and its partners, but it is widely know that if no buyer is found for the gas, the plan will not be realised.
Last August negotiations to sell part of an estimated 4.54 trillion cubic feet to Egypt were seriously compromised after a giant gas field was discovered by Italian energy company Eni in Egyptian waters.
“Selling gas for domestic consumption in Egypt is not really a possibility for Cyprus, as Egypt will be able to cover its needs by 2020,” Charles Ellinas told ‘Cyprus Weekly’.
When BG Group joined Nobel as a partner in Bloc 12 earlier this year, the government had hoped that the South could sell gas to Egypt for liquefaction and onto Europe as liquefied natural gas (LNG). BG (now owned by Shell) is a major partner in the Idku LNG plant in Egypt. However, this option is less certain while current gas prices undermine profits, Ellinas said.