AP: Interest in Israel-Cyprus plan for pipeline from two major gas companies

Energy Minister Giorgos Papanastasiou has told Associated Press (AP) that two major international oil and gas companies have so far expressed interest in Israeli-Cypriot plans to build a pipeline that would convey offshore natural gas from both countries to Cyprus where it would be liquefied for export by ship.

According to AP’s report, Papanastasiou said the plan will on 29 May be pitched to energy companies involved in hydrocarbon exploration off Cyprus’ southern coast and other firms involved in pipeline and gas processing plant manufacture.

Since getting energy companies on board is essential to get the project off the ground, and Papanastasiou will also present it individually to each firm in order to secure their backing, the report added.

According to AP, Papanastasiou also suggested the project’s key draw for energy companies was its low cost relative to other exporting methods, such as an idea for a €6b, 1,900km pipeline connecting east Mediterranean gas deposits directly to Europe.

The roughly 320km pipeline is estimated at €450m and the liquefaction plant at €1b.

AP also reported that Papanastasiou said there’s another option for a liquefaction plant aboard a ship instead of an onshore facility. But went on to noted that the Minister also said new, modular technology used to construct an onshore facility has the advantage of adding or subtracting modules to accommodate more or less capacity, depending on the supply of gas that’s needed.

The modules for the onshore plant would be built abroad and shipped to Cyprus for assembly, AP noted.

Associated Press also pointed out that Israel and Cyprus are already working on finalising a deal for the project and Papanastasiou is expected to head a delegation to the neighboring country for detailed talks in the middle of next month.

Once the Israel-Cyprus agreement is finalised and energy companies sign up, a tender process will open for the construction of both the pipeline and the processing facility, the report continued.

It also noted that Papanastasiou said some of the gas conveyed to Cyprus would be used for domestic power generation in order to reduce energy costs for consumers.

Liquefying natural gas for ship-borne export offers more options regarding markets. Although Europe is the primary target market, Asia could also factor in, according to Papanastasiou, the AP report concluded.