By Elias Hazou
The Natural Gas Public Company (DEFA) on Monday declined to comment on whether it has nixed Delek’s proposal to import natural gas from Israel’s Leviathan field.
DEFA chairperson Eleni Vasiliadou told the Mail however that an announcement on the matter should be expected soon.
On Sunda, Delek’s shareholders reported to the Tel Aviv Stock Exchange that they had not been approached by DEFA to extend the validity of their proposal, which expired on January 31.
“Without a renewed approach from DEFA to request a postponement of the date of validity of the above mentioned proposal, the validity of the partnership’s proposal has expired,” Delek said.
The statement added: “To the best of the knowledge of the partners, the government of Cyprus is examining different possibilities to supply natural gas to the local Cypriot market in addition to the tender, including the possibility of getting the supply of natural gas from the Aphrodite field which is in block 12 offshore Cyprus.”
It’s understood that although up until January 31 Delek was still technically in the running, DEFA was leaning toward M&M and Vitol, with whom it has entered into final-stage negotiations for gas supplies.
It’s also understood that DEFA has renewed until April the validity period of M&M’s and Vitol’s bids.
The timeline is significant, as April coincides with the period around which Noble Energy are expected to present their final development plan for the Aphrodite reservoir.
One of the possibilities being discussed between the government and Noble is diverting some of the Aphrodite gas – the bulk of which is slated for export – to the Cypriot domestic market for electricity consumption.
This would make redundant the so-called ‘interim solution’, although it would depend on how soon Noble can deliver the Aphrodite gas ashore – and at what price.
Through DEFA, Cyprus is seeking natural gas supplies for domestic power generation until the island’s own reserves come online. Under the tender, the date of first gas supply must fall between January 1, 2016 and June 30, 2017.
But development of Leviathan – from which Delek proposed to pipe the gas to Cyprus – has been delayed due to the partners’ run-in with Israel’s anti-trust authority.
The Leviathan partners – Delek and Noble – will therefore likely be unable to meet the Cypriot deadline, reports the Jerusalem Post.
The partners, who are also the main stakeholders in the Aphrodite reservoir, have signed a letter of intent with the British Gas Group for a 15-year supply of natural gas to BG’s empty liquefaction plant in Idku, Egypt.
According to the Jerusalem Post, due to the uncertainty surrounding Leviathan’s fate, the partners have proposed to BG a Plan B should Leviathan exports not occur on schedule.
The plan stipulates that “if Leviathan will not be developed on schedule, Aphrodite will supply them with the gas they need,” the paper reported.