Cyprus Mail

Minister pushes plan for joint gas exports with Israel

By Elias Hazou

ENERGY minister Giorgos Lakkotrypis has confirmed media reports that he has floated a plan for joint exports of natural gas with Israel via a facility in Cyprus.

Under the proposal, Israeli gas diverted to Cyprus for exports would come from the neighbouring country’s Leviathan prospect – one of the world’s larger offshore gas finds of the past decade.

Speaking at a DIKO congress over the weekend, the minister said Nicosia and Tel Aviv are currently engaged in a dialogue on two fronts: using a mooted Cyprus-based LNG plant pooling the two countries’ gas resources for exports; and importing gas from Israeli offshore fields to generate electricity here for Cyprus’ needs.

Lakkotrypis said the issues were discussed during his recent trip to Israel, noting that Tel Aviv was in principle open to both ideas.

“Israel is positively inclined toward the commencement of a dialogue in order to find the best way of exporting [gas] reserves from both sides of the Exclusive Economic Zone,” Lakkotrypis said.

And on Monday, Israel’s High Court of Justice gave the green light to gas exports from Israel after rejecting a petition to nullify an earlier cabinet decision.

The significance of the ruling is that gas exports can now go ahead, especially from the Leviathan field in accordance with the cabinet decision last June, which stipulated that up to 40 per cent of Israel’s gas reserves can be exported.

On Sunday Politis reported that, during Lakkotrypis’ visit to Israel the previous weekend, the minister proposed that Israel export to Cyprus around 5 to 6 trillion cubic feet (tcf) from its Leviathan field. Leviathan holds an estimated 18.9 tcf of natural gas.

Any deal would also have to be okayed by the energy companies with concessions in Israeli prospects. Strictly speaking, the Israeli government does not own the gas, but collects royalties from sales.

The thinking behind the Cypriot proposal, Politis said, was that the 5 tcf from Leviathan and the 3 to 5 tcf from the Aphrodite prospect in Cyprus are combined so that two LNG trains can be built at Vasilikos.

A single LNG train – with an output capacity of 5 million tonnes of LNG per year – would require gas reserves of approximately 5 tcf.

The recent downgrade of recoverable gas from the Aphrodite well has caused some concern as to whether the quantities are sufficient to justify the construction of an LNG facility. Additional finds in Block 12 – operated by Noble Energy – could boost the quantities, but require additional exploration which take time.

It’s understood that Israel is exploring several options on exporting its excess natural gas. A Turkish energy company has reportedly offered to construct a 292-mile pipeline for transferring Israeli natural gas to a southern province in Turkey. Yet another possibility for exporting Israel’s gas would be constructing an LNG plant in Jordan, or utilising existing infrastructure in Egypt.

On the use of Israeli gas to be used for power generation here (the ‘interim solution’), Lakkotrypis said the gas would likely come from the Tamar field.

But because Tamar is currently being used during the day at 100 per cent capacity to power Israel’s own energy grid, any gas diverted from this field to Cyprus would have to be done at night-time.

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