LAKKOTRYPIS' VISIT TO CAIRO REINFORCES ENERGY TIES
The Minister of Energy of the Republic of Cyprus Yiorgos Lakkotrypis visited Cairo on Monday where he met with his Egyptian counterpart Petroleum Minister Tarek El-Molla and Prime Minister Sherif Ismail. The purpose of the visit was to discuss important matters related to energy. In late August, Italian ENI announced a major discovery offshore Egypt: the Zohr field, located in the Shorouk block in close vicinity to Cyprus´Exclusive Economic Zone and estimated to hold up to 30 Tcf of natural gas, is expected to tremendously alter the geopolitical landscape in the region. Neighbouring countries Israel and Cyprus have also made major discoveries in their waters with Israel´s largest offshore fields, the Leviathan and Tamar, estimated at 21 and 10 Tcf respectively. Albeit more modest in size with an estimated 4.54 Tcf, the Aphrodite field discovered by Texan Noble Energy off Cyprus’ coast will also likely turn the island country into a net exporter of natural gas given the negligible domestic demand.
Egypt has been struggling to meet a rising domestic demand and was forced to look for suppliers of natural gas, regionally and beyond. The country has been engaged in talks to import gas from Israel and Cyprus via an undersea pipeline. Export deals with Jordan and Israel have led Egypt to enter a severe energy crisis. The discovery made by ENI will no doubt solve Egypt’s shortage of energy. The field is expected to reach production stage by 2020. In the meantime, Egypt will still need to import the hydrocarbon to satisfy its domestic needs. Egyptian officials have repeatedly reassured their Cypriot and Israeli counterparts that Egypt will still be looking to import gas in the near future.
Egypt is holding a strategic role in the region, not only as a potential customer for Eastern Mediterranean gas but also as a possible route. Egypt´s export terminals at Idku and Damietta are underused and could potentially process Cypriot and Israeli gas to far-reaching export market. Liquefying the gas for export will offer the advantage of flexibility in the choice of the export market. The only concern for Israel and Cyprus remains if Egypt, once its Zohr field goes online, uses up its export terminals to full capacity. Egypt’s discovery has however boosted regional confidence. The close proximity of the field to Cypriot waters has encouraged the resumption of exploration activities in the island’s maritime zone. ENI, TOTAL and Noble will be searching for more gas in the hope to encounter significant amounts of the hydrocarbon.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Karen is also a co-founder of the Lebanese Oil and Gas Initiative (LOGI). She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat
Source: http://www.naturalgaseurope.com/lakkotrypis-visit-to-cairo-reinforces-energy-ties-25847
