|
Address by the Minister of Energy, Mr Y. Lakkotrypis, at the Conference on the security of natural gas supply, in Malta
10/07/2014
|
Allow me first to welcome you all at the Energy Conference, “Security of gas supply: the role of gas developments in the Mediterranean region” and on behalf of the Republic of Cyprus, to thank you for your participation at the event.
I would like to particularly thank the Government of Malta and the Minister of Energy personally, for hosting this event at his beautiful country.
As of today, more than 35 tcf of natural gas have been discovered in offshore Israel, approximately 5 tcf have been discovered in the Cyprus Exclusive Economic Zone (EEZ) and, according to Lebanese officials, preliminary estimates from seismic surveys show resources of about 30 tcf of natural gas in Lebanon. In addition to the Aphrodite discovery in the Cyprus EEZ, we are optimistic for further discoveries in the near future, as over the next 12 to 18 months the exploration activities of our licensees will intensify. Prospects appear very promising. Moreover, there are encouraging indications for oil discoveries offshore Cyprus. Overall, in 2010 the U.S. Geological Survey estimated that hydrocarbon resources in the Eastern Mediterranean (Levant and Nile Delta Basins) could be as much as 3.4 bbl of oil and 345 tcf of natural gas. It is therefore becoming evident, that the region is a new promising source for oil and gas supply, as well as an alternate transportation route.
There has been - and still is - a sometimes heated debate, about the optimum way that Eastern Mediterranean gas resources should be transported to European and international markets. In light of the complex and fragile geopolitical situation in the region, this question could indeed be characterized as a multi-dimensional puzzle.
After carefully examining all of the options, Cyprus has put together a strategic monetization plan, with an Onshore LNG facility at its core located at Vasilikos - at the southern shore of Cyprus, and convenient to process all gas discoveries in the Eastern Mediterranean. We feel that this option is the optimum infrastructure that would enable us to transport gas to European and international markets. Optimum in terms of both, the flexibility it can provide to Cypriot and regional gas, and the commercial advantages it entails.
Additionally, it aligns perfectly with EU strategy of expanding its LNG infrastructure base, as it can supply the current and planned European Regasification Terminals, while remaining largely immuned to risks associated with the fragile political environment in the area.
We are not oblivious to the commercial challenges that this option carries, neither in terms of the required capital nor time-to-market. But we are determined to face them responsibly and pragmatically. We are confident that the Cyprus Onshore LNG Plant could be an important first step towards the concept of the “Eastern Mediterranean Gas Corridor”, within the framework of EU’s policy for the diversification of external supplies and related infrastructure.
Up until the beginning of the 20th century, mankind used to believe that the Universe works in just three space dimensions. That is of course until physicists discovered that Time is an additional fourth dimension, which interestingly forms a continuum to space itself. Allow me therefore to take advantage of this discovery and travel you through time, towards our vision for the Eastern Med region.
While Cyprus has selected to start monetizing its gas via an Onshore LNG Plant (and I emphasize the word Start) at Vasilikos, it is very important that we take a moment away from today’s reality and fast-forward ourselves several years from now, envisioning an Eastern Mediterranean where:
- regional differences have been resolved and companies are operating in a stable, transparent and predictable business environment
- countries in the region are all interconnected, contributing to each other’s security of energy supply
- gas and oil are being transported to European and International markets in a variety of ways and through various routes
- countries in the region are managing their hydrocarbon revenues in a transparent, responsible manner, benefiting current and safeguarding future generations
- furthermore, take a moment to visualize a region that is exporting knowledge to the rest of the world.
One might think that all these are wishful thoughts. And yet, when one looks carefully, he or she can see that for every bit of these goals there is activity which is being pursued today.
Discussions are underway to settle the Cyprus Question and so are efforts to resolve the EEZ boundary dispute between Israel and Lebanon. Regional and international sales of gas are being negotiated, while cooperation is being pursued at all levels aiming at creating exactly the solid, transparent and predictable business environment which I described earlier.
Riding once again our time-machine, please allow me to carry you back to today’s harsh realities. For this vision to materialize, all countries in the region must have the political will to act now, guided by International Law and the values and principles upon which the Union for the Mediterranean is founded. We are indeed being confronted with a historical opportunity to leverage natural resources as a source of cooperation and conflict resolution -- and we must rise to the challenge.
Ladies and Gentlemen,
We are convinced that Cyprus, being the only European Union member in the South Eastern Mediterranean region and a country with excellent longstanding relations with all its Middle East neighbours, is well positioned to play a vital role in achieving this vision.
We seek Europe’s support and strong engagement in securing the vital but delicate region of the Eastern Mediterranean as an alternative source of energy supply and route, contributing to the EU’s energy security. Imagine not what it is today, but what it could be tomorrow. Using footballing terms, Europe must seek to position itself not where the ball is right now, but where the ball is actually heading to.
In closing, I would like to recall what Winston Churchill once said: “The pessimist sees difficulties in every opportunity, whereas the optimist sees the opportunity in every difficulty”; the energy potential of the Eastern Mediterranean region creates the opportunity for peace, stability and prosperity in our area. We recognize the difficulties in this opportunity, but our unwavering aspiration is that optimism will be shared and prevail in the Eastern Mediterranean.
Thank you for your attention. |
|
