COOPERATION: SECURITY AND THE EAST MEDITERRANEAN ENERGY SECTOR | Natural Gas Europe

May 02nd, 2015

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COOPERATION: SECURITY AND THE EAST MEDITERRANEAN ENERGY SECTOR

The Greek Prime Minister Alexis Tsipras has now met with the President of Cyprus Nikos Anastasiades and the President of Egypt Abdel Fattah el-Sisi in Cyprus in a meeting that took place on the 29th of April 2015. The main topics on the table were those of the delineation of the exclusive economic zones between the three states, maritime security of the East Mediterranean and the potential for cooperation in the energy sector.

It is well known, that the current situation in Libya could have the potential to destabilize the region. This fact could prove devastating for the success of the 2nd international offshore licensing round for 20 blocks in the Ionian Sea and the Sea on the South Crete, which Greece is currently running. This is because coupled with the low oil prices, and the political changes in Greece, the uncertainly of Libya will add one more factor which any company that is thinking of bidding in this competition will inevitably have to take under consideration. Especially, since this is a factor of safety for anyone who wishes to develop oil and gas production facilities in the area.

It is obvious that if these countries want to unlock the potential of the region as an alternative energy source for Europe, they must take very some very big steps towards regional cooperation. Firstly, they must secure the whole region through military operations, which will reassure the oil and gas companies that nothing will interfere with their operations. Such policy can be implemented with the creation of a joint military force, assigned with the task of ensuring the safety and stability of the Eastern Mediterranean Sea.

With the oil price level having settled between 55$ - 65$ per barrel, the upstream outlook seems particularly gloomy. The exploration of hydrocarbons on deep-water areas is a very risky and expensive process, so co-operation is needed in order to optimize such operations and make them as cost effective as possible. Hopefully this meeting in Cyprus has sent the right message to the industry, and the announcements that will follow will be targeted towards minimizing the concerns of the industry over the political risk of the region.

However, the equation of South-East European natural gas production could prove to be more complex than anticipated. The discussions over the construction of Turk Stream, or the potential for further natural gas volumes finding their way to Europe from the Middle East via the Trans Anatolian Line, can also add additional noise to this. This is mainly due to the fact that any regional production from offshore wells will have to compete against gas from onshore wells, which adding the transportation costs could still prove to be more competitive.

Thus, according to a number of experts, in order to unlock the full potential of the region, the first commercial target for the natural gas from the regional fields of Cypriot and Israel must be the local – regional - markets. Solutions such as that of Compressed Natural Gas (CNG) could prove to be beneficial allowing for the cheapest transportation of natural gas, compared to pipeline and Liquefied Natural Gas (LNG) options, between distances of maximum 2500 km. Technology that becomes even more relevant after the recent merger between Shell and BG Group. This is because any project which involves assets of BG will probably be delayed, and a prime example could very well be the LNG export terminal of BG in Egypt, which was favored for being used for the natural gas production of Cyprus and Israel.

From a geopolitical point of view the stability on the region can only be guaranteed if Cyprus, Egypt, Greece and Israel find a way to cooperate, and launch a common strategy regarding both the maritime security of the region as well as energy cooperation. The grounds for the latter are clearly paved via the EU strategy for Energy Union, as well as the PCI projects that are targeting this region, and enjoy the full support of the EU, allowing them to enjoy a fast track process and easier access to funds.

Athanasios Pitatzis is Member of the Greek Energy Forum. The opinions expressed in the article are personal and do not reflect the views of the entire forum or the company that employs the author. Follow Greek Energy Forum on Twitter at @GrEnergyForum and Athanasios at @thanospitatzis

Source: http://www.naturalgaseurope.com/east-mediterranean-energy-sector-security-23506

Egypt homes in on Cyprus’s Aphrodite gas find | Interfax

Egypt homes in on Cyprus’s Aphrodite gas find

Written by
Rachel Williamson

Posted
1 May 2015

Licence blocks offshore Cyprus.

Egypt is pinning its hopes on Cyprus and its large offshore gas reserves, following a second high-level state visit by the Egyptian premier to the island state.

Although the flying visit on Tuesday by President Abdel Fattah el-Sisi yielded no new political commitments on energy, Egypt’s Ministry of Petroleum told Interfax the visit pushed forward the case for future gas imports from Cyprus.

"The memorandum of understanding [MOU] signed between Egypt and Cyprus… on the sidelines of the Egypt Economic Development Conference will no doubt pave the way for both countries to start the implementation potential during the coming period, along with the progress of the well from Cyprus’s Aphrodite field," said a statement from Petroleum Minister Sherif Ismail’s office. "It will no doubt boost such cooperation between Cyprus and Egypt in the gas domain."

A spokesperson for the ministry said no date had been set for signing an official deal on gas imports, and research was being carried out on whether pipeline or LNG imports would be more feasible following two MOUs signed between the countries in February and March.

While Egypt’s Ministry of Electricity and Energy has said a deal at the political level is still in the early stages, Egyptian Natural Gas Holding Co. (EGAS) is moving ahead quickly with its plans to import gas from Cyprus.

Under the MOU signed between EGAS and Cyprus Hydrocarbon Co. (CHC) during the investment conference in March, the two organisations were given a mandate to look into building a submarine pipeline. Not only has Egyptian engineering firm Enppi been chosen to conduct the technical studies, but Egypt also expects first gas deliveries to start by 2017.

EGAS Chairman Khaled Abdel Badie was quoted by local media as saying the company is in talks to import roughly 20 million cubic metres of gas per day from the Aphrodite field, off the coast of Cyprus, through a pipeline he expects will be completed within three years.

EGAS could not be reached for comment, but the Ministry of Petroleum spokesperson said the organisation has the state’s full support in driving the technical discussions forward.

Aphrodite expectations

However, this relies on production from Aphrodite starting around 2017, the year Badie wants deliveries to Egypt to begin. As Cyprus’s hydrocarbon ambitions have taken a hit this year following disappointing exploration results in other licence areas, both countries are gambling on the single field to supply gas.

Noble Energy, Aphrodite’s owner, has yet to declare whether the field is commercially viable – despite expectations voiced by Cyprus’s Energy Minister Yiorgos Lakkotrypis in March that an announcement would be forthcoming in April.

However, Noble is unlikely to make any such statement about the field for some months, a source familiar with the matter told Interfax.

Furthermore, Aphrodite was supposed to be developed alongside Israel’s Leviathan field, but an anti-monopoly case against the owners of the field, Noble and Delek Group, by Israel’s Antitrust Authority has thrown the original timeline into uncertainty. A tender to supply gas via a pipeline from Leviathan to Cyprus was postponed again last week because of this uncertainty.

The other setback to Cyprus’s regional gas ambitions is the lack of positive results from the Kogas and Eni consortium from its Block 9 exploration programme, and the temporary exit of Total after it failed to find potential drilling sites in its Block 10 and Block 11 licensed areas.

Maritime borders

While no concrete progress was made on energy matters during Sisi’s visit, the parties took time to discuss Cyprus’s territorial integrity, following Turkey’s dispatch of a seismic research ship into waters claimed by the Republic of Cyprus in November and January.

In a communiqué following the meeting with Sisi, the Cypriot government tied the future development of its gas reserves to the legal settlement of its disputed maritime borders with Turkey.

"We recognise that the discovery of important hydrocarbon reserves in the eastern Mediterranean can serve as a catalyst for regional cooperation. We stress that this cooperation would be better served through the adherence by the countries of the region to well-established principles of international law," the communiqué said.

"We emphasise the universal character of the UN Convention of the Law of the Sea, and decide to proceed expeditiously with our negotiations on the delimitation of our maritime zones, where it is not yet done."

Source: http://interfaxenergy.com/gasdaily/article/16001/egypt-homes-in-on-cypruss-afind

NOBLE ENERGY: APHRODITE HAS POTENTIAL TO SUPPLY THE DOMESTIC MARKET , MEET STRONG REGIONAL DEMAND | Natural Gas Europe

April 30th, 2015
NOBLE ENERGY: APHRODITE HAS POTENTIAL TO SUPPLY THE DOMESTIC MARKET , MEET STRONG REGIONAL DEMAND

In Cyprus, the focus seems to solely on the the Aphrodite field. The disappointing results released by the Italian-North Korean consortium ENI/KOGAS, and TOTAL’s temporary withdrawal from the island’s Exclusive Economic Zone, have eclipsed the island’s ambitious ambition to turn into a regional natural gas hub and instead shifted the focus on the development of the Aphrodite field.Natural Gas Europe spoke to Noble Energy, the Texan company involved in Cypriot and Israeli waters, to learn more about the island’s future plans.

Noble Energy told Natural Gas Europe that the Aphrodite field, discovered in 2011 and estimated at 4.54 Tcf, has the potential to supply the domestic market and help meet strong regional demand. Noble added the Texan company was looking forward to working closely with the government and the people of Cyprus to achieve the economic benefits that these resources can provide, as well as increase energy security.

At this stage, Noble is conducting various meetings with the Government of Cyprus to progress the development plan for Aphrodite and is working towards submitting a draft proposal in the near future that will open the door to declaring Aphrodite commercial. Noble Energy did not dismiss plans of future gas explorations in the island’s maritime zone, stating that further drilling would be discussed in conjunction with development plan with the government of Cyprus.

Cyprus has been eyeing regional markets, including Jordan and Egypt, to export its natural gas resources. Neighbouring Israel has made significant gas discoveries in its waters and is also engaged in talks to export to immediate neighbours, including Egypt, Jordan and the Palestinian Authority. Delayed decision-making and ongoing domestic debates have prevented Israel from finalising export deals and accelerating production from the 21 Tcf Leviathan field. Lebanon is also believed to hold substantial hydrocarbon resources, but the political vacuum in the country has caused several postponing of the country’s first licensing round despite considerable interest from major oil and gas companies expressed at the country’s pre-qualification round in 2013.

The Eastern Mediterranean region is facing major challenges in its path towards production and export of natural gas. Whilst Cyprus’ most important setback is its bad luck in its exploration activities, Israel must resolve domestic disputes to move closer to the production of its Leviathan field and secure regional deals. Lebanon has a long way to go as it struggles to issue crucial pieces of legislation that will allow the launching the country’s first bidding round and exploration activities to commence.

Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. 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/noble-energy-aphrodite-field-supply-domestic-market-regional-demand-23430?utm_content=buffere8923&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

700m cubic feet of gas to be imported daily from Cyprus by 2017: EGAS | Daily News Egypt

700m cubic feet of gas to be imported daily from Cyprus by 2017: EGAS

Mohamed Adel  /   April 29, 2015  /   0 Comments

Marine pipeline will be established to Aphrodite field within three years

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The Egyptian Natural Gas Holding Company (EGAS) is negotiating to import roughly 700m cubic feet of gas daily from the Cypriot Aphrodite field, owned by US company Noble Energy.
(AFP photo)

The Egyptian Natural Gas Holding Company (EGAS) is negotiating to import roughly 700m cubic feet of gas daily from the Cypriot Aphrodite field, owned by US company Noble Energy.

In a statement to Daily News Egypt, EGAS Chairman Khaled Abdel Badie announced that the marine pipeline will be completed within two and a half to three years.

Abdel Badie also said that Enppi will handle the technical and engineering studies to set the closest route for the line in the Mediterranean. The line will link the Aphrodite field to Egypt through the deep waters of the Mediterranean. The gas will be received in a treatment station and will then be pumped to clients.

Abdel Badie expects that the Cypriot gas will be sent to Egypt by 2017, after finishing the pipeline and preparing Noble Gas with the equipment to facilitate production.

A Memorandum of Understanding (MoU) was signed between EGAS and Cyprus Hydrocarbons Company (CHC) to start an information exchange. Technical and economic studies of establishing the pipeline with a length of 400km to import gas from the Aphrodite field will also be undertaken.

The cost of establishing the pipeline will be divided between Cyprus’ government and Noble Energy, on one side, and the Egypt government, BG, and Union Fenosa, on the other side.

Abdel Badie said that he visited Cyprus at the beginning of the month to start the information exchange for importing gas, and negotiations will continue with CHC.

The MoU allows EGAS and CHC to find technical solutions for gas transportation through a direct marine pipeline from the Aphrodite field to Egypt. It will positively affect operation of both the EDCO and Damietta liquefaction plants and fulfil the country’s gas needs. It is expected that the agreement will be implemented within six months after the MoU’s signing.

President Abdel Fatah Al-Sisi arrived to Cyprus on Tuesday, in an official visit that will also include Spain. The president of Cyprus, Nicos Anastasiades, and the republican honorary guard received the Egyptian president at the airport.

With his Cypriot counterpart and the Greek Prime Minister Alexis Tsipras, President Al-Sisi held two meetings, and a trilateral summit followed by an expanded session of talks, where delegations from the three countries participated.

Egypt has previously signed an agreement with Cyprus to be able to purchase gas in order to fulfill Egypt’s needs.

Source: http://www.dailynewsegypt.com/2015/04/29/700m-cubic-feet-of-gas-to-be-imported-daily-from-cyprus-by-2017-egas/