Cyprus Mail

Still early days for gas exports in any form (web)

In case some people get excited, these exploratory (6 drills) and confirmatory (2 drills) moves mean very little in terms of future revenue. All Cyprus is doing is identifying on a map where possible gas deposits are located. The deposits contain gas which is quite expensive and very difficult to monetize. So, mapping should not be confused with riches which don’t exist and probably will not exist for another 20 years or so if ever.

Instead of emphasizing the “riches” potential (which is a very dubious claim due to geology and depth), Cyprus needs to find a way to convert such nearby gas (in the least complicated way – meaning no LNG) into cheap electricity which will satisfy the needs of the whole island and provide opportunities for electricity exports in the East Med and Europe (including Turkey). The easiest pipeline to build is to the island itself (shortest distance). Electric cable interconnections are far preferable to fixed pipelines which are rigid and without delivery flexibility. Gas exports in any form are way, way down the road and are not a proven proposition yet. Announcement of gas discoveries only increases the geopolitical importance of Cyprus but so far they have negligible economic benefits which could be demonstrated and as such they don’t yet exist.

As a result it’s foolish to fight over imaginary future benefits and create a lot of noise over nothing of substance.

Eight offshore drills for hydrocarbons over next 24 months

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