articles | 11 March 2013

LNG terminal is the ‘only way forward’

Building a costly liquefied natural gas (LNG) terminal is the only way for Cyprus to export its hydrocarbons, says head of Cyprus’ state hydrocarbons company (KRETYK) Charalambos Ellinas.

KRETYK head Charalambos Ellinas says the state hydrocarbons company is preparing an action plan to submit to the new commerce minister in the coming days. The plan lays out positions on pending issues relating to the company’s own existence, the debate over an LNG terminal, Noble Energy’s pending exploitation of the Aphrodite field in block 12 of Cyprus’ Exclusive Economic Zone (EEZ), as well as discussions with French giant TOTAL and Italian-Korean consortium ENI/KOGAS, who were granted exploration licences for five blocks in total. 

Speaking to Cyprus' state broadcaster CyBC, Ellinas argued in favour of an LNG terminal saying that it was the best and only option available to the country. He also referred to the need to start promoting Cyprus’ estimated natural gas reserves to Europe and elsewhere, “something which we haven’t done until now”.

KRETYK officials will be travelling to Milan next week for talks with ENI which has licences for blocks 10 and 11, while TOTAL will arrive in Cyprus the week after for talks on its licences for blocks 2, 3 and 9 within Cyprus’ EEZ. According to Ellinas, both ENI and TOTAL are keen to get started on seismic surveys as soon as possible. Former commerce minister Neoclis Sylikiotis told reporters last month that TOTAL was expected to begin drilling next year.

Regarding the option of building a costly LNG plant to liquefy gas from Cyprus’ EEZ and possibly others, and then export it overseas, Ellinas said a decision has been taken and it was time to explain that decision to the public. He argued that a lot of focus regarding this issue has been on whether the estimated 7 trillion cubic feet of gas in Cyprus’ block 12 is enough to make a terminal viable.

“What we’re saying is we have another five blocks,” said Ellinas, adding that by the time gas from block 12 goes to the LNG terminal, gas reserves from Cyprus' other five blocks will also come a year later. “The terminal is not only for the Aphrodite field but all these other (blocks) as well, and not only is it viable, it is the only way to export natural gas,” he said, adding that Cyprus will likely find five times the quantity of gas it has found so far once exploratory drilling is completed on the other five blocks. 

The KRETYK head dismissed the option of building a pipeline to Turkey instead, arguing there were many obstacles preventing that option, like the water depth in Cyprus' EEZ. “The terminal is the only way. We want the freedom to export to markets,” he said.

Source: Cyprus Mail

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