Royal Dutch Shell Plc said it is considering buying natural gas from Israel’s Leviathan field and market it together with gas from Aphrodite, turning the eastern Mediterranean into a major gas producing hub that would include production in Egypt, Bloomberg News reported on Monday without citing its source.
The output from Leviathan and Aphrodite would then be pumped to liquefaction plants in Egypt while some Cypriot gas could also be sold locally, Bloomberg reported.
Talks on diverting some of Aphrodite’s gas to the island, it said, are at an early stage.
The Houston-based Noble Energy Inc., which almost six years ago announced the Aphrodite discovery, and its Israeli Delek Drilling LP, Noble’s partner in both Cyprus and Israel, are estimated to need up to $3.8bn (€3.2bn) to develop the required shipment infrastructure, Bloomberg reported. Upgrading the capacity to deal with Shell could further increase the amount. Shell’s involvement in Aphrodite resulted following the acquisition of British Gas (BG).
Cyprus has unsuccessfully attempted several times over the past 7 years to allow its state-owned power producing company Electricity Authority of Cyprus switch to natural gas. Last month, a consortium of France’s energy company Total and Italy’s Eni started exploratory drilling in block 11 of Cyprus’s EEZ, close to the spot in Egypt’s exclusive economic zone (EEZ) where the Italian firm made a mammoth discovery in 2015.
Following the latest failure early last year, the state-owned natural gas company Defa, announced a new tender less than a year ago.
The inclusion of Egypt’s Zohr, the 30 trillion cubic feet (tcf) gas discovery in the Arab nation’s EEZ, which dwarves Aphrodite’s 4.5 tcf and is roughly double the size of Leviathan, expected to start production in two years, could create a gas production centre at Europe’s doorstep, in an area of geopolitical tensions, Bloomberg reported.
Noble remains in talks to pump production to Egypt for both domestic consumption and re-export via its liquefaction plants, which could accommodate production from both Leviathan and Aphrodite, Bloomberg reported citing a Noble Energy spokeswoman.