Israel-Europe Gas Pipeline Emerging From Fantasy, Netanyahu Says - BLOOMBERG

15 June 2017, 11:35 p.m. EEST

Jonathan Ferziger

• [Israel, Greece, Cyprus] leaders back building conduit at summit meeting
• Additional gas finds might be needed to make project feasible

Leaders of Israel, Greece and Cyprus agreed Thursday to push forward with construction of a pipeline that would bring gas to Europe from offshore fields in the Mediterranean.

“A few months ago it was in the realm of fantasy,” Israeli Prime Minister Benjamin Netanyahu told reporters after a three-way summit in Thessaloniki, Greece. “Now it’s becoming real.”

The meeting brought Netanyahu together with Greek Prime Minister Alexis Tsipras and Cypriot President Nicos Anastasiades to sign a joint statement on strengthening economic cooperation. The centerpiece is the East-Med Pipeline, which would bring gas from Israeli fields to Greece and Italy through what would be the world’s longest undersea connection.

The Israeli push to connect the eastern Mediterranean through pipelines in a region grappling with longstanding conflicts is going to be hard to carry through, especially as world energy prices remain depressed. A second proposed pipeline, to Turkey, would have to go through Cyprus, which has been divided since a Turkish invasion of the north in 1974. 

Comment: Keep gas off the Cypriot peace talks agenda

Brirish bases on Cyprus: vital for western interests and tightly
linked to the internationally recognized Republic of Cyprus 

January 10th, 201710:25am

John Roberts

The leaders of the Greek and Turkish communities in Cyprus, together with a host of international officials, are meeting in Geneva now to try to end a partition that has lasted for 43 years. But it might be best if they agreed to omit any substantive discussion at this stage of a particularly difficult issue – gas.

The reason is that the discovery of gas in the eastern Mediterranean in general, and off the south coast of Cyprus in particular, is fraught with both practical and emotional problems that makes it much easier to conceive of successful development in the wake of a Cyprus settlement than as a significant constituent part of the negotiation process.

One Cyprus? - FOREIGN AFFAIRS

October 27, 2016Jonathan Gorvett

A Deal Is Close, But Not Certain

At the end of this month, the island of Cyprus is scheduled to undergo another division, adding to its long history of intercommunal splits. At 4 AM on October 31, the southern, Greek side of the island will set its clocks back by one hour in accordance with European winter time. Yet for the first time ever, on the other side of the UN-patrolled buffer zone dividing the south from the [illegally occupied by Turkey] Turkish-majority north, time will stay the same. There, in the [so-called] Turkish Republic of Northern Cyprus (TRNC), the breakaway state recognized only by Turkey, clocks will align with those in Ankara instead, following the Turkish government’s recent decision to abolish daylight saving time.

‘Τurkey may not respect Cyprus’ EEZ but the US does’ - CYPRUS MAIL

JUNE 9TH, 2016

PSEKA delegates in Washington

The US State Department’s Special Envoy and Coordinator for international energy affairs Amos Hochstein has said that while Turkey may not respect the EEZ of Cyprus, the United States does and said without “resolution in Cyprus” no pipelines can go through its EEZ from Israel to Turkey.

Hochstein, who was addressing the 32nd Congress of the International Coordinating Committee’s Justice for Cyprus, also known as PSEKA, on Wednesday, also called energy a “game changer” and an incentive for a settlement of the Cyprus problem.

“In 2011 Noble Energy was exploring in Aphrodite. Turkish F-16s were flying over and there was other naval activity. But they stopped and since then there was no interference in Cyprus’ ability to explore its offshore,” he said.

Only two options for Cyprus gas: Turkey or FLNG - IN CYPRUS / CYPRUS WEEKLY

24/04/2016
By George Telaveris

The government has received the draft gas field development plan for the Aphrodite field in Block 12 from Noble Energy and its partners, but it is now an open secret that unless Cyprus clinches a deal with a potential buyer, the plan will remain on paper.

Negotiations to sell part of the estimated 4.54 trillion cubic feet (tcf) in Block 12 to Egypt were seriously undermined following the discovery of the Zohr supergiant gas field by Eni in Egyptian waters last August.

“Selling gas for domestic consumption in Egypt is not really a possibility for Cyprus, as Egypt will be able to cover its needs by 2020,” hydrocarbons business consultant Charles Ellinas told the Cyprus Weekly.

The gas find in Zohr is estimated at 30 tcf or 850 billion cubic metres. All of it will be allocated to cover the Egyptian domestic market.

‘Cyprus deal a Turkey gas pipeline prerequisite’ - IN-CYPRUS

incyprus — 10/04/2016

In an interview with Greek-language daily Kathimerini, published on Sunday, Foreign Minister Ioannis Kasoulides said a prerequisite for a gas pipeline to Turkey is a solution to the Cyprus problem.

In reference to Turkish President Recep Tayyip Erdogan’s energy aspirations, Kasoulides said a Cyprus reunification deal could offer the possibility of routing a gas pipeline from the eastern Mediterranean to Turkey, either for domestic consumption or for transport to Europe.

“[Such a development] implies, of course, a solution to the Cyprus problem for which Turkey is invited to contribute via stances that would allow a settlement, rather than positions that lead to dead ends,” Kasoulides said.

Pipeline to Turkey is on the table | IN CYPRUS / CYPRUS WEEKLY

Simos Simou — 21/11/2015

By George Telaveris

Israel, Cyprus and Egypt are in discussions about the possibility of exporting natural gas to Turkey, according to the Israeli energy minister, Yuval Steinitz.

“I’m not allowed to say much about this but we are examining the option,” he told Globes newspaper, referring to discussions among Israel, Cyprus and Egypt on the joint development of gas fields in their countries.

“The first option is the joint development of reservoirs and through the existing liquefied gas installations in Egypt and a second option is building a gas pipeline to Turkey, and from there the gas can continue to Europe.” Sending gas to liquefied natural gas (LNG) gas plants is in line with statements by the Cyprus energy minister, George Lakkotrypis, who says that talks about exporting natural gas to Egypt are advancing.

Our View: Reality must replace geo-political and gas dreams | Cyprus Mail

OCTOBER 4TH, 2015 

President Nicos Anastasiades and Egyptian President Abdel Fattah al-Sisi in Nicosia in April.

THE FOREIGN ministers of Cyprus, Greece and Egypt met when they were in New York last week in order to arrange the third tripartite summit which is expected to be held later this month in Athens. This would complete a full circle of tripartite summits, with one having been held in Cairo last year and a second in Nicosia in April.

Neither of these produced anything more tangible than some pictures of the smiling leaders shaking hands. There was also a declaration signed in each case – the Cairo and subsequently the Nicosia declaration – which spoke of economic co-operation and the strengthening of political ties among the three countries. While building good relations with neighbouring countries is good, we suspect that much more is made out of these summits than they actually have to offer.

President Anastasiades seems to relish them, as they support much of the government discourse regarding Cyprus’ geo-strategic value, the potential of becoming a regional energy centre and the need to forge alliances with neighbouring countries. Since the time of the Papadopoulos presidency the foreign ministry has been arguing about the need for geostrategic alliances, on the dubious grounds that these would strengthen Cyprus’ position in its dealings with Turkey.

Many politicians and newspaper columnists have repeatedly raised this issue, going as far as to suggest that geo-strategic alliances, based on energy co-operation, would be a better course to follow than engaging in negotiations for a settlement. The preferred country for a strategic alliance has been Israel – especially after Tel Aviv’s falling out with Ankara – and although there has been an exchange of visits between Prime Minister Benjamin Netanyahu and Anastasiades as well as a three-way meeting also involving Greece, nothing tangible has been agreed. The mooted tripartite summit of Cyprus, Greece and Israel has been more difficult to arrange, probably because Netanyahu does not see much point to it.

Cyprus is once again trying to box above its weight, but the problem is that it does not really have anything attractive to offer its potential strategic allies. As things stand, it is only a bit-player in the eastern Mediterranean energy field, given the relatively small quantities of natural gas that have been discovered. This has not stopped the government’s relentless efforts to play up the country’s energy significance and pursue alliances that have little more than publicity value.

Anastasiades and his energy minister Giorgos Lakkotrypis insisted, against all logic, that Egypt would be buying natural gas from Cyprus even after the discovery of huge deposits of natural gas in Egypt’s Zohr field – almost 10 times the quantity in our Aphrodite field. What company would invest hundreds of millions, if not billions, on pipelines to take gas from the Aphrodite field to Egypt which has huge quantities of hydrocarbons – much closer to home – that would meet its energy needs for decades? Anastasiades and Lakkotrypis need to stop claiming they will be selling gas to Egypt, because nobody can take them seriously.

In fact the entire government narrative about energy alliances that would strengthen Cyprus seems to be collapsing. Our other potential energy partner, Israel, which has never made any concrete commitment in relation to energy, has reportedly been talking to Turkey about the possibility of supplying it with natural gas. Netanyahu informed Anastasiades about this during his short visit to the island recently, suggesting that both countries could sell gas to Turkey, once there was a Cyprus settlement.

Despite the rhetoric about the energy alliances, Anastasiades has had meetings with the representatives of a big Turkish energy company in the past, indicating he is pragmatic enough to explore all options. How ironic that all the government’s grand designs have fallen by the wayside and the only potential client for our natural gas is Turkey which is not only a very big market, but is also close enough to be supplied at a competitive price.

Admittedly, there could be no such deal without a settlement, but it is still looks like the only viable option for Cyprus to monetise its modest gas finds. Having a huge market like Turkey’s so close and a deal to supply it would also be a big incentive for oil companies to increase their exploratory drilling in the Cypriot EEZ, especially as there would also be regional stability.

This is the pragmatic way forward and not the much-touted tripartite summits, which are little more than publicity exercises. Even the dream of becoming a regional energy centre requires a settlement to be realised.

Source: http://cyprus-mail.com/2015/10/04/our-view-reality-must-replace-geo-political-and-gas-dreams/

Hope yet for a Cyprus gas hub | in-cyprus.com (Cyprus Weekly)

Hope yet for a Cyprus gas hub

Fiona Mullen — 06/09/2015 - in-cyprus.com 

Officials are putting a brave face on the announcement by Italy’s ENI on Sunday that it had found an estimated 30 trillion cubic feet offshore Egypt. And judging from the latest news about the interest by British Gas (BG) in taking gas from Aphrodite in to its LNG plant in Idku, maybe it is not over yet.

But if, as some fear, it has put an end to both Israel’s and Cyprus’ hopes of exports to Egypt, it has indirectly opened up other opportunities.

Before outlining those, let us deal with the notion that ENI’s natural gas find might make Cyprus rich if the Zohr reservoir crosses the Cyprus Exclusive Economic Zone (EEZ). This is a red herring. The indications so far are that it is all on Egypt’s side. Even if the reservoir does stretch that far (more than 6.5 km), Cyprus might hope for only a small proportion of the total.

Most importantly, no one will know if there is any gas on the side until they start production drilling, which is some five years away. Something that is highly uncertain could therefore distract policy-makers from focusing on the real opportunities that have presented themselves.

LNG or pipeline?

If Israel cannot export gas to Egypt, then the land-based liquefied natural gas (LNG) in Vasiliko plant suddenly comes back into play.

According to my own calculations (detailed in my August report), combining the maximum exportable Leviathan gas (75%) with Aphrodite brings an LNG plant closer to viability. However, prices would still need to rise 15% from today to make it work.

Another problem with LNG is that it makes Cyprus’ export strategy reliant on the politics in Israel, which has so far prevented any exports from Leviathan.

The other option is a pipeline to Turkey, which of course depends on a solution of the Cyprus problem.

At today’s prices, according to my calculations, a Turkey pipeline might also be a commercial challenge if it exported only Aphrodite gas. One suggestion is that Turkey pays for the pipeline and a united Cyprus pays it back in gas, thereby locking Turkey into the deal.

With the above in mind, it seems that the government’s Plan A should be to solve the Cyprus problem and send the gas to Turkey. If that doesn’t work, Plan B would be to wait for Israel to get its act together, the gas price to go up and then jointly build and LNG plant.

The regional hub opportunity

Adam Lomas, Managing Director of Castor Partners, says that either an LNG plant or a pipeline from Vasiliko would help Cyprus become the regional gas hub that it has always sought to be.

“Cyprus is the only safe country in this region. It could become the secure transport hub for all the stranded gas in the Levant,” says Lomas.

This could be gas from Aphrodite, Leviathan, Tamar and, if the Eni gas find encourages Total to come back and look again at Block 11, gas from Block 11 too.

A solution of the Cyprus problem would make the opportunity even bigger, because it would bring in all those companies like Shell and Exxon that have kept away from Cyprus because they have big interests in Turkey.

The writer is Director of Sapienta Economics www.sapientaeconomics.com

Source: http://in-cyprus.com/hope-yet-a-for-cyprus-gas-hub/

Not Just a Pipe Dream | Cyprus Weekly

July 24, 2015, Michael Leigh,Senior Fellow

The scenario of a pipeline from the offshore natural gas fields of Aphrodite to Cyprus and then onshore to Turkey is not as Utopian as it might seem, Sir Michael Leigh of the German Marshall Fund told the Cyprus Weekly. But it is premature today to take a front position on that, added the visiting senior advisor at the Washington DC based public policy think tank and a former European Commission director for enlargement.

"It would be in some respects less expensive, require less initial investment than for example the idea of building a 350 kilometre pipeline from the fields to Egypt," Leigh said.

Read the full article (PDF).

Source: http://www.gmfus.org/commentary/not-just-pipe-dream