articles | 10 May 2019

Energean makes fresh offer to build Israeli gas pipeline to Cyprus

Greek oil and gas firm Energean has submitted to the Cyprus Energy Regulatory Authority (CERA) an updated proposal to supply the island with natural gas through an FPSO, which will commence operations in March 2021 in the EEZ of Israel.

It said the technical report presents in detail the way natural gas will be imported to Cyprus through pipelines from Karish offshore block to the ‘Energean Power’ Floating Production, Storage and Offloading unit, and from there through a pipeline to Vasiliko where it will emerge onshore.

Energean has also signed a Letter of Intent (LOI) for the supply of natural gas to private power generation licence holders in Cyprus.

It said the plan, “offers Cyprus the opportunity to import gas at a very competitive price, with no upfront infrastructure costs, for the benefit of the Cypriot economy and Cypriot electricity consumers”.

Energean said it would establish competition in the Cypriot energy market as a whole, as there are now options for the supply of natural gas to private electricity producers.

“It enhances the planning of the Republic of Cyprus and the security of supply, as our plan is supplementary to the LNG import procedures launched by the Cypriot Government…it strengthens the geopolitical role of the Republic in the region,” said a company statement.

The Greek firm said it has already initiated the procedures for obtaining the necessary Natural Gas Εxport and Pipeline Construction Licences from its FPSO in the Israeli EEZ to Vasiliko.

CEO of Energean Mathios Rigas said: "We have submitted a comprehensive Plan to supply the Republic of Cyprus with natural gas through the infrastructure that Energean is constructing and will be operating in Israel.”

The company argues that its solution is “cheaper and quicker than any other” and that having multiple supply sources strengthens security of supply as well as competition for the benefit of consumers and the economy.

“We are at the disposal of the Cypriot Government and the Cypriot Authorities to discuss how this Plan could be implemented so that Cyprus will be able to start using affordable natural gas in March 2021, provided there are no delays in permitting procedures,” said Rigas.

Cyprus’ Natural Gas Public Company (DEFA) has issued a tender for the design, construction and operation of a floating LNG import terminal to be located at Vasiliko Bay, near Limassol, separately of efforts to import the fuel by January 2020 to avoid emissions fines.

Recent reports suggested that Shell, a partner in one of the offshore oil and gas exploration blocks, was keen to bid for the supply, but that this could be considered a conflict of interest, as the Dutch-UK energy giant also has controlling stakes in natural gas liquefaction plants in Egypt, where Cyprus gas could eventually be piped to.

Energean made an informal approach to the government last year to develop and take Aphrodite gas by pipeline to the FPSO (Floating Production Storage and Offloading facility) it proposes to use to develop its Karish and Tanin gas fields in Israel, treat it and export it to Cyprus.

Last July, DEFA described as “unsolicited” a proposal from Energean to build a pipeline to Cyprus from Israeli offshore gas fields.

DEFA chairman Simeon Kassianides said at the time that the proposal was not submitted as part of a call for tender. Once the tender is called, he added, any interested company, Energean included, could submit their proposals.

The new tender, issued on behalf of the Natural Gas Infrastructure Company (ETYFA), is for a floating storage and regasification unit (FSRU), a jetty for mooring the FSRU, a jetty borne gas pipeline and related infrastructure, all of which is expected to cost some €250 million.

The LNG terminal will be completed in 2020 and has secured a funding of 40%, or up to €101 million, as a grant from the EU under the Connecting Europe Facility (CEF) financial instruments.

Energean is an independent listed on the London and Tel Aviv stock exchanges.

Source: Financial Mirror

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