articles | 21 September 2014

EIB discusses energy investment in Cyprus

European Investment Bank (EIB) President Werner Hoyer recently met with President Anastasiades in Nicosia where the main focus of discussion was energy investments.

According to the press, the two met for 45 minutes at the Presidential Palace after which no statements were made.

Sources told the island’s main broadcaster that the biggest part of the discussion focused on energy issues and, in particular, on the potential financing of a Liquefied Natural Gas (LNG) terminal on the south coast of Cyprus.

The same sources said Hoyer was briefed on government plans regarding the terminal and asked to be kept informed on future developments.

Asked to comment, Finance Minister Harris Georgiades said: “We are certainly not at the stage yet of talking specifics about this prospect, but it interests us and we pursue it.”

When quizzed later by reporters on whether the EIB would be funding an LNG terminal on the island, Hoyer responded: “I never heard about it.”

He qualified that his team was in Cyprus to sign a big investment for small-and-medium-sized enterprises to promote growth and employment.

At the same time, the EIB is “aware” that gas exploration in Cyprus’ exclusive economic zone (EEZ) is underway, but that so far, “there are no results”.

Hoyer added: “I hope that there will be positive results. If that translates into an investment project presented to us, we will check it and discuss it. But there is no commitment whatsoever until there is a project on the table. This is not the case yet.”

Despite recent discussions on the potential of selling Cypriot gas to neighbours Jordan and Egypt, the government continues to insist that its main target remains the construction of a costly LNG terminal at Vassilikos, provided adequate quantities of recoverable gas are found in Cyprus’ EEZ.

This would give the country greater flexibility in exporting the gas, in terms of both the means of export, and the final destination, argues the government.

A key decider in whether the project is even feasible will be the results of upcoming offshore exploration by Italian-Korean consortium ENI-KOGAS.

Earlier this month, the government reserved areas in the eastern Mediterranean for gas drilling operations by issuing a NAVTEX (Navigational Telex) reserving areas within Cyprus’ EEZ in international waters.

At the time, Energy Minister Giorgos Lakkotrypis said the areas reserved are in offshore blocks 2, 3 and 9. Local media reported that ENI-KOGAS will drill a first well in the ‘Onasagoras’ field in its block 9 concession.

The consortium is contractually obliged to drill at least four wells.

Lakkotrypis said ENI’s drilling programme will span 12 to 18 months, depending on the finds, with each drill lasting about 80 days, at a depth of between 5,000 to 5,500 meters.

Drilling is expected to start shortly, with the first results likely available in early 2015.

Source: Cyprus Mail

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