articles | 26 May 2014

Cyprus an alternative energy corridor

U.S. Vice President Joe Biden’s visit to Cyprus sent an international message that Cyprus can provide an alternative energy corridor for the supply of natural gas, says Energy Minister Giorgos Lakkotrypis.

Speaking to the press, the minister said: “The visit of the US Vice President sends big and loud messages to many places abroad. (The Americans) see Cyprus not only as an alternative source of supply but potentially an alternative corridor of energy supply.” Cyprus and America have a number ofpriorities set that they will pursue in the following months to achieve tangible results, said Lakkotrypis.

He mentioned examining ways to achieve the best possible exploitation of hydrocarbons in the region to ensure supply to the EU. The minister also spoke about the need to look at how the EU could provide practical assistance in the construction of an LNG terminal at Vassilikos.

Asked whether pressure was put on Cyprus to agree to export its gas reserves to Turkey via pipeline, he said: “I can state categorically that the Americans have not raised this issue.” Lakkotrypis said the US and Cyprus delegations discussed Europe’s need to wean itself off of energy supplies - a likely reference to the EU’s dependence on Russian gas - and create alternative corridors of energy supply.

Regarding Cyprus’ plans to build an LNG terminal, the minister said Biden stressed the various options that exist for dealing with hydrocarbon deposits and the need for Cyprus to choose the best one taking into consideration the time factor. “Look, certainly the US will also look at the interests of its partners active in the region,” he added.

Asked about US views on the need to secure Cyprus’ rights over its Exclusive Economic Zone, in the face of continued Turkish harassment, Lakkotrypis said: “They consider it a given.” He called for patience, arguing that US diplomacy should be allowed to do its work. Assessing the Biden visit yesterday to reporters, Foreign Minister Ioannis Kasoulides highlighted the role Cyprus could play in enhancing regional cooperation.

“Cyprus can be useful in the transport of natural gas, which cannot be done directly by some neighbouring countries,” he said, refraining from going into further detail. Some commentators suggest the US is interested in the possibility of Cyprus acting as a go-between for Israel and Egypt though, exactly how has not been made clear.

Asked whether this regional cooperation would take place using pipelines, liquefied natural gas or compressed natural gas (CNG), Kasoulides said the government’s policy remains in favour of the use of an LNG terminal at Vassilikos to export natural gas. “This has not changed and is in our plans.”

However, given the less than expected reserves found so far in Block 12, an LNG terminal for the moment is not sustainable, unless the relevant companies with Israeli offshore concessions decide to pool some of their deposits with Cypriot hydrocarbons to make a Cyprus-based LNG terminal viable. Otherwise, Cyprus has to wait and see the results of planned hydrocarbons exploration by ENI and TOTAL in Cyprus’ EEZ, he said.

“We, like all others, are interested in the speedy economic exploitation of these hydrocarbons, and are obliged to have alternative solutions, like floating (LNG) units,” he said; a possible reference to the option of sending Cypriot gas to one of the two currently inactive LNG terminals in Egypt for export as a short-term quick fix. Regarding CNG, he clarified compressed gas can only be used when dealing with short distances, for example, from Block 12 to Vassilikos, and would not work for export to distant markets.

A pipeline to Turkey is also an option but only after a Cyprus problem solution, said the foreign minister, adding that this does not invalidate planning for a terminal “because it is wise for each country to have more than one method of export to secure their flow”.

Source: Cyprus Mail

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