Cyprus Mail

Delek puts in bid for interim gas supply

President Anastasiades will have this morning successive meetings with delegations of Israeli Delek Group and of Italian ENI

By Elias Hazou

THE PARTNERS developing Israel’s offshore Leviathan field have announced they have put in a bid to sell gas to Cyprus via a pipeline.

In a statement on the Tel Aviv Stock Exchange (TASE) on Wednesday, Israel’s Delek Group said it and its Leviathan partners – Noble Energy and Ratio Oil Exploration – have bid in the tender published by Cyprus’ Natural Gas Public Company DEFA.

The tender issued by DEFA has two options: one is for the supply of gas from early 2016, and no later than the second half of 2017, through 2022, followed by three one-year options to extend; the second is for the supply of gas through 2025.

According to Delek, which is listed on TASE, “the offer is in accordance to the estimated development schedule of Leviathan and subject to, inter alia, the agreement between the bidders and the Cyprus government on the terms of a binding agreement for the supply of natural gas, not later than August 21, 2014, as well as a number of other conditions.”

Israeli financial daily Globes estimated the bid to be worth around $3bn. Globes also reported that other bids have come from Dutch-owned oil trader Vitol, a group led by Azeri state oil company SOCAR, and a Greek consortium.

DEFA yesterday declined any comment, citing confidentiality agreements between it and the interested suppliers. Its board is reportedly due to meet next week to begin assessing the technical dossiers of the four submitted bids.

It is not clear whether DEFA has set a deadline for the tender process.

The Cypriot tender aims to secure so-called “interim” supplies of gas for domestic power generation. The island nation is reliant on heavy fuel oil imports to power its grid, and is seeking to cut its energy bill by switching to the cheaper natural gas.

Earlier media reports indicated that a price of $10 or $11 per million British thermal units would be satisfactory to DEFA.

Delek has not disclosed a cost estimate for the subsea pipeline they propose to build from Leviathan to Cyprus. The pipeline’s cost would heavily impact the price of the gas sold to Cyprus.

The Leviathan prospect is expected to come online around the year 2017.

If built, a pipeline to Cyprus could conceivably be put to use subsequently should Israel agree to pool its gas reserves with Cyprus’ in a planned liquefaction plan on the island.

Delek is also a partner in Cyprus’ Block 12 concession along with Noble Energy.

Related posts

Shocking images of dead flamingos probably a result of lead poisoning

Peter Michael

Foreign ministry offers condolences after deadly Turkish earthquake

The wines of the Peloponnese at festival

Eleni Philippou

State institutions continue to squabble

Jonathan Shkurko

Cyprus accused of blocking new EU sanctions against Russia amid Turkey spat

Reuters News Service

Bad tenants beware, House passes tougher eviction law (updated)

Evie Andreou


Comments are closed.