Iain Esau in London
Eni is set to sanction a major new project offshore Cyprus in 2024 and is studying onshore and offshore liquefied natural gas solutions, according to the company’s head of natural resources.
The Italian major is also exploring the possibility of working with US giant ExxonMobil on a joint development of their Cypriot gas resources, although this appears the least likely option at present.
Eni has found at least 4.5 trillion cubic feet of gas-in-place in Block 6 offshore southern Cyprus in recent years, resources held in the deep-water Calypso, Cronos and Zeus discoveries that were drilled between 2018 and late 2022.
Zeus-1 was completed late last year, hitting 105 metres of net pay in a carbonate reservoir that hosts between 2 Tcf and 3 Tcf of gas in place. This find came after the Cronos-1 probe found 2.5 Tcf of in-place resources last August, while the play-opening discovery was made by the Calypso-1 wildcat in 2018. Speaking to Upstream last week, Guido Brusco, chief operating officer of Eni’s natural resources business, explained the company’s thinking on how best to tap this gas. He said there are “clearly” two options, “either floating LNG or a tie-in to Egypt”, where Eni operates the Damietta LNG plant.
“We have capacity in one of the two LNG plants in Egypt. We are looking at it as an option,” he said. The choices are to feed gas from Block 6 either to infrastructure that handles production from Eni’s 30 Tcf Zohr field in Egypt, or to another of the company’s hubs in the country’s waters. “There are so many options to divert our production… [Egypt] offers a lot of optionality,” Brusco said. Nevertheless, he stressed that FLNG remains in contention, adding: “We have not yet ruled out the possibility to have an FLNG vessel.”
Eni has had a positive experience with its 3.4 million tonnes per annum Coral Sul FLNG vessel in Mozambique, Brusco said, while also highlighting the industry’s ability to now deliver floating liquefaction solutions at a low cost. As for the capacity of an FLNG vessel for Block 6, he said it “would be slightly less than Coral, if we only rely on our resources”.
However, the vessel could be just as big as the Mozambican FLNG unit if it is designed to also handle gas from ExxonMobil’s Glaucus discovery in adjacent Block 10 offshore Cyprus. “If we can combine with discoveries made by others it might be the size of Coral,” Brusco said. Eni and ExxonMobil are completing resource assessments for the blocks at the moment.
Cronos holds about 2.5 Tcf and Zeus between 2 Tcf and 3 Tcf while, in an apparent reference to Calypso, Eni’s executive said “other discoveries we made in past are less than 1 Tcf”.
Glaucus may hold up to 8 Tcf of gas, although this was a very early estimate made on the back of the 2019 discovery well and before an appraisal well was drilled last year. Eni is in the concept-select and engineering phase of its proposed Block 6 development but plans to move fast towards sanction. Brusco said the aim is to make the final investment decision “sometime next year”.
However, before the project can be sanctioned, Eni must discuss development options with TotalEnergies, its 50% partner in Block 6, as well as Egyptian and Cypriot stakeholders if the tie-back solution is chosen. Opting for an FLNG vessel would simplify the decision-making process compared with an Egyptian tie-back and could result in an accelerated schedule, Brusco noted.
“FLNG would reduce the number of engagements and we may go faster,” he said. He did, however, point out that a joint project with ExxonMobil — which it partners on the Mozambican Coral Sul FLNG vessel — would add “complexity” to the decision-making process.
Feeding Block 6 gas to Egypt would mesh with the North African country’s goal of becoming an even bigger energy hub in the East Mediterranean region and a key supplier of gas — and eventually hydrogen — to Europe.
Egypt already imports gas from Chevron’s assets in Israel, while the US giant has a plan to send gas from its Aphrodite project in Cyprus to Egypt. Block 6 is located about 80 kilometres northwest of Zohr, where production is currently between 2.4 billion and 2.5 billion cubic feet per day, Brusco said. Infill wells are being drilled to maintain production and equipment is being built to handle the increasing volumes of water being produced, with plans in hand to build gas compression facilities. According to Eni’s 2022 annual report published last week, work is under way on new subsea hardware and a pair of 6000 barrels per day combined water treatment modules and the potential requirement of three additional modules each with 3000 bpd capacity, boosting water treatment capability from 6000 bpd to 15,000 bpd.
Iain Esau has been reporting on Africa, Europe and Canada for Upstream since 2000, having started his oil and gas journalism career with Offshore Engineer in 1988 followed by a four-year stint at Lloyd’s List.
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Cronos holds about 2.5 Tcf and Zeus between 2 Tcf and 3 Tcf while, in an apparent reference to Calypso, Eni’s executive said “other discoveries we made in past are less than 1 Tcf”.
Glaucus may hold up to 8 Tcf of gas, although this was a very early estimate made on the back of the 2019 discovery well and before an appraisal well was drilled last year. Eni is in the concept-select and engineering phase of its proposed Block 6 development but plans to move fast towards sanction. Brusco said the aim is to make the final investment decision “sometime next year”.
However, before the project can be sanctioned, Eni must discuss development options with TotalEnergies, its 50% partner in Block 6, as well as Egyptian and Cypriot stakeholders if the tie-back solution is chosen. Opting for an FLNG vessel would simplify the decision-making process compared with an Egyptian tie-back and could result in an accelerated schedule, Brusco noted.
“FLNG would reduce the number of engagements and we may go faster,” he said. He did, however, point out that a joint project with ExxonMobil — which it partners on the Mozambican Coral Sul FLNG vessel — would add “complexity” to the decision-making process.
Feeding Block 6 gas to Egypt would mesh with the North African country’s goal of becoming an even bigger energy hub in the East Mediterranean region and a key supplier of gas — and eventually hydrogen — to Europe.
Egypt already imports gas from Chevron’s assets in Israel, while the US giant has a plan to send gas from its Aphrodite project in Cyprus to Egypt. Block 6 is located about 80 kilometres northwest of Zohr, where production is currently between 2.4 billion and 2.5 billion cubic feet per day, Brusco said. Infill wells are being drilled to maintain production and equipment is being built to handle the increasing volumes of water being produced, with plans in hand to build gas compression facilities. According to Eni’s 2022 annual report published last week, work is under way on new subsea hardware and a pair of 6000 barrels per day combined water treatment modules and the potential requirement of three additional modules each with 3000 bpd capacity, boosting water treatment capability from 6000 bpd to 15,000 bpd.
Iain Esau has been reporting on Africa, Europe and Canada for Upstream since 2000, having started his oil and gas journalism career with Offshore Engineer in 1988 followed by a four-year stint at Lloyd’s List.
SOURCE
