Cyprus Mail
Cyprus Energy

Minister brushes off notion of gas differences in government camp

By Elias Hazou

THE Citizens’ Alliance, which continues to advocate the presale of natural gas, said on Monday it is drafting a comprehensive blueprint for transforming Cyprus from an oil-based into a gas-based economy.

The proposal would be submitted to the government once it was ready.

“That would be a boon to our country, the economy and our children’s future,” its head Giorgos Lillikas said after a meeting with energy minister Giorgos Lakkotrypis.

During their talk, the minister briefed Lillikas on natural gas developments. Coming out of the meeting, Lillikas said that for obvious reasons he could not disclose the specifics of their discussion.

But, he added, the energy minister “is moving in the right direction.”

For his part, Lakkotrypis said the government is “evaluating holistically the energy potential of our Exclusive Economic Zone.”

He brushed off the notion that differences exist within the government camp on whether Cyprus should launch a third licensing round for hydrocarbons in its EEZ.

Last week Lakkotrypis hinted the government was considering the possibility, following the discovery of the massive Zohr gas field in Egyptian waters, in close proximity to Cyprus’ EEZ.

But in comments over the weekend, leader of the ruling DISY party Averof Neophytou said a new licensing round now was probably not a good idea, proposing instead the renewal of exploration licences on currently licensed offshore blocks.

Asked by reporters how the Aphrodite field in Block 12 might be developed, Lakkotrypis said:

“What is under examination is what will be the composition of the natural gas sent from Zohr to Egypt, and what will be the composition of our own natural gas.

“We know that based on the production and development plan [for Aphrodite] we shall be transporting processed gas, but we do not yet have a clear picture as to how the gas from Zohr will be transported to Egypt.

He added: “Certain technical issues must first be cleared up before we determine whether this option is technically feasible.”

It’s understood he was referring to the concept of pooling the gas from Zohr and Aphrodite into one pipeline and then transporting it all to Egypt.

Meanwhile in a separate statement, the Citizens’ Alliance panned DISY’s Neophytou, who in a bizarre remark on Saturday said Cyprus should consider presales of natural gas to Egypt and/or Jordan.

Lillikas said Neophytou, who had previously laughed off the idea as “hot air,” now agrees with them.

According to Lillikas, the island would have needed no bailout in 2013 had it presold its natural gas reserves in the Aphrodite field.

“After the memorandum [of understanding] was foisted on us, a significant portion of natural gas proceeds will unfortunately end up in the coffers of the troika, and not in the Cypriot economy,” asserted Lillikas.

Under the Citizens’ Alliance proposal, presumably Cyprus could have issued IOUs backstopped by future gas sales. But their pitch seems to overlook the fact Cyprus has not identified markets for its natural gas, or that commercial decisions ultimately rest with energy companies.

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