articles | 03 September 2015

British BG group eyes Aphrodite

UK gas giant BG Group PLC is in discussions with the Cyprus government to buy natural gas for its Idku plant in Egypt, Energy Minister George Lakkotrypis announced recently.

The minister said that he met representatives from BG on Wednesday and Thursday in Cyprus.

BG is also in consultation with Noble, Delek and Avner, the consortium that owns the licence to Block 12 in which the Aphrodite field lies, as well as with the Cyprus Hydrocarbons Company (CHC). The aim is to buy Cypriot natural gas from the Aphrodite field in offshore Block 12 for the Idku plant, in which BG has a 35.5% shareholding.

Despite the negative initial assessments about the impact of the massive gas find on Cyprus, the estimated 30 trillion cubic feet in the Zohr field actually opens up an opportunity for Aphrodite, the Cyprus Weekly has learned.

When Egypt did not have enough of its own gas, there was a possibility that gas from Cyprus would end up being used for domestic consumption, rather than being sold on international markets.

This created two risks. First, that it would be going to a less stable market with a poor record on payments. Second, that it could not compete on price with domestically produced Egyptian gas.

If gas from Idku is sold on international markets and with a long-term contract, then these risks subside.

Nevertheless, Lakkotrypis was at pains not to pre-empt the outcome of the talks with BG, saying that the effort to sell natural gas to Egypt “is basically a question mark”.

The Energy Ministry will provide Noble with its comments the development plan submitted to the government on June 10.

Source: InCyprus

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