Cyprus Mail

Netanyahu victory seen as boosting LNG plant prospects

Nicosia is said to be watching the upcoming elections in Israel with particular interest, eager to discuss with the new government in Tel Aviv the possible inclusion of Israeli natural gas deposits into a mooted liquefied natural gas (LNG) terminal in Cyprus.

According to daily Politis, the government would prefer that incumbent Benjamin Netanyahu remain in office after Tuesday’s elections in Israel, ensuring continuity in ongoing talks over the prospects for a proposed LNG facility at Vasilikos.

At the latest Cyprus-Greece-Israel trilateral summit in Tel Aviv on March 20, Netanyahu appears to have telegraphed that he is seriously considering green-lighting part of the Leviathan reservoir’s gas being diverted to a land-based LNG project in Cyprus.

Israel’s other option would be to export the Leviathan gas to Turkey via pipeline – but the project is fraught with tensions between Tel Aviv and Ankara over Gaza, and more recently the shifting situation in Syria.

Citing non-government sources, the paper said the matter of the LNG terminal was scheduled to be discussed between the Cypriot and Israeli delegations during the summit, but the discussions eventually did not take place due to logistical issues that cut that meeting short.

At any rate, the decision to participate in a Cyprus LNG project would ultimately rest with Noble Energy, operators of the Leviathan prospect.

The inclusion of Leviathan’s reserves would make the project immediately viable. In order to be viable, an LNG plant would require at least 12 trillion cubic feet (tcf) of gas; currently, the total discovered gas in Cyprus’ Exclusive Economic Zone falls well short of that threshold.

This is despite ExxonMobil’s recent discovery of a gas play in block 10, estimated at between 5 to 8 tcf.

Politis said that in a briefing to the Cyprus parliament, Exxon officials stated that the recoverable gas from the Glafcos field is believed to be around 80 per cent – or between 4 to 6.4 tcf.

For the time being, as far as the Cyprus LNG project is concerned, the government is not factoring in the approximately 4.5tcf of gas in place in the Aphrodite field, in block 12.

The companies owning Aphrodite are in talks with the operators of the Idku LNG plant in Egypt.

Meanwhile the precise amount of gas present in the Calypso field in block 6 is still unknown, as an appraisal well has yet to be drilled there.

The same report claimed that, contrary to public pronouncements by both Israel and Cyprus, the proposed EastMed pipeline has fallen out favour – due to the huge cost and technical challenges involved.

The two governments are merely paying lip service to the EastMed, the paper added.

ExxonMobil has already indicated its interest in financing and building an LNG plant on the island, provided that sufficient gas is discovered.

The US oil giant is reportedly planning to drill another exploratory well in block 10, possibly in late 2019 or early 2020.

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