China eyes stake in Cyprus gas plan
Island's natural gas reserves attract Chinese with possible investment in an export terminal
PUBLISHED : Wednesday, 19 February, 2014, 1:33am
UPDATED : Wednesday, 19 February, 2014, 1:33am
George Lakkotrypis said the Chinese delegation to the island includes China Shipbuilding Industry Corp. Photo: SCMP Pictures
China is looking at playing a role in Cyprus' multibillion-dollar plans to develop the island's natural gas reserves, including possible investment in a liquefied natural gas (LNG) export terminal.
Cyprus hopes to attract large investors to take a stake in its gas fields, an option which a Chinese delegation is in Cyprus to discuss.
"There is very strong interest from China … in energy, in the whole value chain, upstream, downstream and midstream," Cypriot Energy Minister George Lakkotrypis said yesterday.
He said the Chinese delegation includes China Shipbuilding Industry Corp.
He said delegates were interested in the development of an LNG export terminal, including potentially a floating LNG facility. "The Chinese delegation will also discuss taking a stake in Cypriot gas fields," said a source with the delegation.
China is seeking to access new gas sources around the world as its energy demand rises and the government encourages industry to move to cleaner gas from coal.
Italian energy major ENI is also interested in Cyprus' gas fields, and is set to sign a memorandum of understanding with the government over the construction of an LNG export terminal.
ENI has already signed an exploration and production-sharing contract with the government to search in three offshore areas, with exploration expected to begin in the second half of this year.
In hopes gas can buoy the economy, which was rescued by an international bailout in March 2013, Cyprus has been planning the Vasilikos LNG export plant since United States-based Noble Energy discovered the Aphrodite field.
The estimated US$10 billion needed to build the LNG export terminal and infrastructure would be the largest investment in the island's history.
However, the project was thrown into doubt when drilling results revealed smaller reserves than initially hoped.
Mean reserve estimates were reduced to five trillion cubic feet from seven tcf, which is not enough to justify building the LNG project unless more gas is found. The plans also face opposition from Turkey, which has said it would oppose any attempt to pre-sell Cypriot gas before a settlement over the divided island is found.
This article appeared in the South China Morning Post print edition as China eyes stake in Cyprus gas plan
Link to source: http://www.scmp.com/business/commodities/article/1430692/china-eyes-stake-cyprus-gas-plan
