President: Cyprus advances its strategy to create a gas-corridor from East-Med to Europe

President: Cyprus advances its strategy to create a gas-corridor from East-Med to Europe

Cyprus Government continues to advance its strategy for the creation of a gas-corridor from the East-Med to Europe, by collaborating with potential transit countries, said President of Cyprus Nicos Anastasiades in his keynote speech, at the 7th Mediterranean Oil & Gas Forum 2016, in Nicosia.

The President referred to Bulgaria, which he recently visited,, as a potential transit country. He also pointed out that according to the regional market outlook, especially in the Southern and Eastern Mediterranean, energy demand is expected to double by 2030, while electricity demand is expected to triple.

“Moreover, Europe’s annual gas consumption, could partly be met by natural gas from the Eastern Mediterranean”, he said

Noting that Cyprus, is energy isolated, with no electricity or gas interconnections linking the island with the EU internal energy market, the President said that the necessary energy infrastructure is a prerequisite not only to lift the country’s isolation, but also for the promotion of regional cooperation through common projects.

For this purpose, he said, the Republic of Cyprus is promoting three projects that were selected by the European Commission as Projects of Common Interest (PCI’s). The first project is the so called “Euro-Asia Interconnector”, an electricity interconnection between Israel, Cyprus and Greece, supported by all three Governments. The second is the gas pipeline project called “EastMed Pipeline”, which will connect Cyprus to Europe via Greece. And the third aims at “Removing internal bottlenecks in Cyprus to end isolation and to allow for the transmission of gas from East Med”.

“In effect these projects, while lifting Cyprus’ isolation, they will also constitute the means through which the Eastern Mediterranean will be linked to the EU”, he said.

As the President pointed out, Cyprus’ goals are in line with the EU`s recent Energy Union strategy, which has identified the Mediterranean as a strategic priority, for reducing EU dependency on particular fuels, energy suppliers and routes.

“In this respect, it is our strong belief that the Eastern Mediterranean corridor can play an important role in the EU’s energy security. Our aim remains to support the EU in its diversification efforts, with Cyprus, as an EU member state, with a stable legal and political environment and constituting a reliable partner for both neighboring countries and oil and gas companies”.

Referring to the overall volatile situation in the area, conflicts with regards to the delimitation of maritime zones, the instability in Syria and the continuation of traditional animosities, the Cypriot President said that the above are just some of the issues that create uncertainties in the efforts to develop the region’s hydrocarbons wealth.

“What is urgently required in most cases is to build trust and this essentially translates to all parties respecting international law, as well as the sovereignty and the sovereign rights of neighboring countries”, he said.

The President added that the discovery of natural gas reserves in Cyprus’ Exclusive Economic Zone is considered today to be an area of top priority for the Cypriot Government, not only because major energy developments are foreseen, but also due to the fact that these developments are closely related to economic and geopolitical matters that are equally important to Cyprus Government.

“Our main objective is the optimal and sustainable development of the island’s hydrocarbon resources that will benefit all Cypriots and future generations”, he said.

Following the two licensing rounds launched in 2007 and 2012, the Government of Cyprus has entered into six Exploration and Production Sharing Contracts. As a result of the first exploration well in Block 12, operator Noble Energy International Ltd announced in December 2011 a significant natural gas discovery, the “Aphrodite” field. In October 2013, Noble Energy also successfully drilled an appraisal well. The latest independent resource assessment confirmed a mean gross natural gas resource of 4.5 Tcf.

In January the consortium ENI/Kogas and the Government of Cyprus have signed a two-year extension of the initial exploration phase for Blocks 2, 3 and 9. In addition Total, the licensee of Block 11, has entered into the first two-year renewal of its Exploration License and it is anticipated that an exploration well in Block 11 will be drilled by the end of the year.

“These developments are extremely important. They reaffirm and advance Cyprus’ energy prospects during a period in which the international oil and gas industry is experiencing challenging conditions”, said the President.
Referring to to the efforts for commercial development of the Aphrodite gas field, he said that the production Plan is currently discussed with the view to agree with the Contractor the soonest.

At the same time, he said, “we are engaged into commercial discussions with potential buyers”.

“The “Aphrodite” field is in fact located at a privileged offshore position, allowing for multiple export development scenarios, with a regional pipeline option to Egypt and Cyprus seems to be commercially the most viable option”, he said. He added that another important positive development for the monetization of the Aphrodite field is the agreement between Noble and BG, which was recently approved by the Government.

He also said that ENI’s announcement of the world class gas “Zohr” discovery offshore Egypt, confirms the important gas potential of the region, not only for exploration purposes but for investments as well. As a consequence, he added “we have recently witnessed strong interest in the Blocks of Cyprus’ EEZ”. Responding to this call by the industry, he said, the Council of Ministers decided in February to launch a third licensing round for oil and gas exploration.

The President also referred to the bilateral and trilateral cooperation that Cyprus has with Greece, Egypt, Israel and Lebanon, to promote the relations in the energy sector in the region.