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Cyprus

Noble CEO says next step is to line up customers

Noble Energy CEO David Stover said on Wednesday, the company’s main next steps would be its marketing effort to identify potential customers for the gas from the Aphrodite field.

“I think that is one of the key things that we are focused on, so that can support the development economics of the project,” Stover said after a meeting with President Nicos Anastasiades in Nicosia.

Asked if Noble had a timetable, Stover said the timing would depend on having the customers lined up, and then negotiations with the customers.

“Once you have enough of an anchor supply or an anchor customer base then you can lay out a better time frame, so that will be the next key step,” he said.

Stover said he had been to Israel on Monday and Tuesday meeting with the government and was doing the same in Cyprus.

“We have a chance to meet with the government and our office and update everyone on our plans and just check in with each other and understand how we are moving forward on the plans for Aphrodite,” the Noble CEO said.

“I think we can make progress, we brought in a new partner, the BG group that is now moving into the shell portions and that is exciting for us, they are a very strong partners to help with the development of the project and they are still getting organised and consolidated now but having good communication.”

Citing its own sources, public broadcaster CyBC reported that the Block 12 consortium are in talks with five potential customers.

BG acquired 35 per cent equity in offshore Block 12, Aphrodite last November in a transaction worth $165m (€155m).

Under the deal, Noble remains the operator of Block 12, retaining 35 per cent of equity. The other stakeholders are Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership, each with a 15 per cent working interest. The move allows Noble to spread out the capital investment risk.

The agreement also achieves an “alignment of interests” given that the new stakeholder in Block 12 – BG – also holds equity in the LNG export facility at Idku, Egypt.

Energy Minister George Lakkotrypis, who was also at the meeting, said he and Stover had discussed the development and production of Aphrodite, Strover’s contacts in the region and the prospects in the wider Eastern Mediterranean area, especially in the light of the third licensing round which Cyprus would soon announce.

Now that BG’s entry into the Block 12 consortium has been formalised, said Lakkotrypis, the government would be resuming talks with the consortium with a view to wrapping up the talks on a development plan for ‘Aphrodite’.

The government expected BG’s remarks on the development plan sometime in the next few days, he added.

The total cost of developing Aphrodite is estimated at between €2bn and €3bn.

Responding to a question, Lakkotrypis said that at this stage there has been no change in the timetable for the production of natural gas from the ‘Aphrodite’ prospect.

As things stand, producing gas from Aphrodite is scheduled for 2020.

Once a commercial gas sales deal is struck and customers are lined up the parties would sign a long-term contract spanning 10 to 12 years, and in turn the Aphrodite stakeholders would begin pouring money into the infrastructure.

 

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