BG invests in Cyprus gas
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| License Rights Shares in Block 12 after BG Group's investment |
British multinational oil and gas company BG Group announced this week that it had taken a 35% holding in Cyprus’ offshore Block 12, which includes the Aphrodite gas field.
BG is clearly planning to use its investment to feed its liquefied natural gas (LNG) plant in Idku on the coast of Egypt.
“This upstream position provides a potential source of gas to Egypt where BG Group holds equity in the two-train LNG export facility at Idku as well as LNG offtake rights to lift 3.6 mtpa,” BG said in a statement.
The deal would bring the share of US-based Noble Energy in Block 12 up to 35% from 30% today, thus putting the British and UK firms on an equal footing.
It also means that the Israeli Delek Group, which had made a bid to increase its share to 70% back in July, would remain at 30%.
The investment is subject to the approval of the Cypriot government, which may prefer a big hitter like BG over Delek, given ongoing concerns about Turkey’s possible reaction to offshore drilling.
Based on remarks by Energy Minister George Lakkotrypis earlier this week the agreement seems likely to be forthcoming.
“This is very important for the Republic of Cyprus since it aligns the commercial interests of ‘Aphrodite’ with our goal, which is to channel natural gas to pipe natural gas to Egypt,” he said.
Noble was also pleased with the deal. Noble Energy’s Senior Vice President of Eastern Mediterranean, Keith Elliott, said, “Entering this upstream partnership with BG in our Cyprus discovery is an important step in moving the project forward for development.
“BG brings substantial technical, financial and marketing capacity to the partnership.” He added that they had recently commenced gas marketing efforts for Aphrodite, “primarily targeting customers in Egypt, including both domestic purchasers and underutilised liquefied natural gas (LNG) plants”.
Noble said that the deal with BG was struck for a total cash consideration of $165 million.
BG could share in the cost of bringing the gas to market. The total long-term value of the gas has been reported by the media at €2-3 billion.
Source: http://in-cyprus.com/bg-invests-in-cyprus-gas/
