articles | 02 April 2015

Block 12 partners targeting regional markets

The consortium with a concession on offshore Block 12 will submit their development plan for the Aphrodite gas prospect to the government, Energy Minister Giorgos Lakkotrypis said recently.

“The development plan will essentially describe in detail the ways in which the subsea infrastructures will be done for the exploitation of the Aphrodite reservoir, as well as the potential markets which this exploitation will target,” Lakkotrypis told reporters after briefing a closed-doors session of the House commerce committee.

The Block 12 partners – Noble Energy and Delek – are targeting regional markets.

“We are talking about Cyprus, Egypt or even Jordan,” the minister said.

Responding to questions, Lakkotrypis clarified that though the government is still waiting for the development plan, preliminary plans are looking at a floating production, storage and offloading (FPSO) vessel combined with subsea pipelines to the possible destinations earmarked.

An FPSO is essentially a platform producing and treating the gas on-site. The gas would then be piped to existing LNG facilities in Egypt.

Jordan meanwhile is currently building an LNG terminal at the port of Aqaba. The terminal is scheduled for completion by July, according to reports.

Asked about the cost of developing Aphrodite, Lakkotrypis said they had some estimates available, but declined to disclose them until the government had in its possession the development plan.
The Aphrodite play holds an estimated 4.5 trillion cubic feet of natural gas. It is understood that a small portion of the gas is to be channelled to the Cypriot market for domestic electricity generation.

“The timeline we are looking at right now for the advent of natural gas, either to Cyprus or to the destination with which we will strike commercial agreements, envisages 2018, 2019 or 2020,” Lakkotrypis said.

The minister was asked also whether it was certain that no further drilling would be taking place in Cyprus’ offshore blocks until 2017. “No, nothing is certain,” he commented.

On the ENI-KOGAS consortium – which recently hit a dud in Block 9 – Lakkotrypis said the companies have requested an extension to their exploration programme, allowing them time to re-evaluate their geological model.

The government, assisted by its foreign consultants, is considering the request and would give its answer within the next few days, Lakkotrypis noted.

ENI-KOGAS’ exploration license expires in February 2016. Asked whether the revision of Total’s contract set a precedent for ENI as well, Lakkotrypis said: “We don’t think so, these are two completely cases.”

In January, it emerged that French oil giant Total had found no potential drilling targets in their two offshore concessions (blocks 10 and 11) and were likely to pull the plug on their operations. The government subsequently amended Total’s contract, waiving a penalty for not drilling exploratory wells.

For his part, House commerce committee chairman Zacharias Zachariou (DISY) told reporters that, based on the minister’s briefing, “nothing is being suspended, we are proceeding according to schedule, and unsuccessful drills are part of the programme.

“We are not the only country with unsuccessful drills,” the MP said, adding: “In general, the probability of discovering natural gas is about 25%, and the probability of finding commercially exploitable quantities is 18%.”

Source: Cyprus Mail

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