Cyprus, French energy company sign memorandum on natural gas plant
NICOSIA, Nov. 7 (Xinhua) -- Cyprus and French giant Total energy company signed a Memorandum of Understanding (MoU) on Thursday to develop a natural gas liquefaction terminal on the south shores of the eastern Mediterranean island.
According to an official announcement, the MoU sets down Total's commitment to give priority consideration to using the plant for liquefaction and export of natural gas to Europe and Asia.
It states that the two sides agreed to cooperate in connection with the future use of the liquefaction plant taking into consideration Total's views on the development of the project.
Total has secured two offshore blocks in the Cyprus marine Exclusive Economic Zone and is expected to start exploratory drilling for both gas and oil next year.
Cyprus has also signed a similar MoU with Texas-based Noble Energy, which has already tapped a gas reserve in a separate block, estimated to contain between 3.5 and 5.5 trillion cubic feet of natural gas.
Cyprus is negotiating with Israel to jointly develop the liquefaction plant which will also serve exports by Israel, which has tapped huge amounts of natural gas in the Levantine basin of the eastern Mediterranean.
Gas reserves in Cyprus' Exclusive Economic Zone are estimated at over 60 trillion cubic feet, but the gas is not expected to reach land before 2020.
Economically depressed Cyprus is pinning its hopes for economic recovery on income from the building of the liquefaction plant, which will provide employment opportunities for thousands of unemployed people and future gas sales.
The project, along with constructing an undersea gas pipe, is estimated at 10 billion euros (13.4 billion U.S. dollars).
The European Commission recently approved three projects of common interest which concern Cyprus, one of them being a feasibility study for a natural gas pipeline from Cyprus to Greece.
Cyprus entered into a 10-billion euro bailout agreement with international lenders earlier this year and its banking system was dealt a near-mortal blow when it was forced to recapitalize by using uninsured depositors' money.
A group of technocrats from the European Commission, the European Central Bank and the International Monetary Fund is set to conclude a second review this year of the Cypriot economy on Thursday, which government sources expect to be successful.
This will entitle Cyprus, which has been shut out of international markets since May 2011, to receive more loan money to finance its government operations.
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