Join our crew and become one of the 104,727 members that receive our newsletter.

LNG dahej terminal

Cyprus Considers Eight Train LNG Export Terminal

Bloomberg
Total Views: 26
July 12, 2013

LNG terminal file photo, Image: Petronet

(Bloomberg) — Cyprus, the Mediterranean island that reported its first offshore natural-gas find in 2011, is studying an expansion of planned export capacity to help revive economic growth.

The country may build as many as five liquefied natural gas production lines, or trains, in addition to a planned $12 billion, three-train terminal near Limassol, according to Cyprus National Hydrocarbons Co., in charge of all gas developments. Extra gas for the plants could come from nearby countries.

“Three trains won’t be enough,” Chief Executive Officer Charles Ellinas said by telephone. “We may have land available for eight trains, to also make sure we can accommodate gas from Israel and Lebanon.”

Cyprus plans to start LNG exports in 2020 after it invited international companies to explore offshore. Gas shipments are part of a plan to boost the sputtering economy following a 10- billion euro ($13 billion) bailout agreement with European partners and the International Monetary Fund this year.

The government in June approved a framework for negotiating construction of the first terminal with Houston-based Noble Energy Inc. and Israel’s Delek Drilling LP and Avner Oil Exploration LLP. A company will be set up this year to run the plant and arrange LNG sales starting early in 2014, Ellinas said.

Noble Discovery

Noble has a 70 percent stake in Block 12 off Cyprus and in late 2011 said it found 7 trillion cubic feet (198 billion cubic meters) of gas. The company last month began a second phase of appraisal drilling. Delek and Avner have 15 percent stakes in the same block.

Total SA and Eni SpA have Cypriot exploration licenses too and are “keen on joining the LNG project,” Ellinas said yesterday. Total, which has rights to Blocks 10 and 11, may also be interested in working with Noble at Block 12, he said.

“We are in discussion with the Cyprus authorities to see how we can support them to develop a gas monetization scheme including LNG export,” Anastasia Zhivulina, a spokeswoman for Paris-based Total, said today, declining to comment on its potential interest in joining Block 12.

Eni is interested in investing in the terminal if oil and gas are found at its blocks, CEO Paolo Scaroni said yesterday.

Export of LNG, or gas chilled to a liquid for shipment, may help revive an economy that’s set to shrink about 13 percent in the next two years, IMF forecasts show. The plant may create as many as 10,000 jobs from as early as 2016, when construction is due to start, Ellinas said. Domestic gas output will also feed local power plants, helping to cut electricity bills.

Israel Gas

Cyprus is in talks with Noble on the potential for additional supplies from its Israeli Leviathan field for export from the Cypriot LNG plant, Ellinas said.

Cyprus has an advantage over Israel because it has already chosen a site for a terminal, Noble CEO Charles Davidson said in April.

Israel, which has found about 950 billion cubic meters of gas offshore, is studying ways to export the fuel from a region marked by political tensions. The choices include a floating LNG platform in its waters or delivery to regional hub Turkey. Noble expects commercial output from Leviathan around 2016.

“The government’s gas-export policy has to allow for multiple options,” Noble said in June. “We will explore every opportunity, but if the range is too limited, some of those opportunities will be lost.”

Gas from Noble’s Block 12 off Cyprus, which may contain “at least one more gas field,” will feed the terminal’s first train, which will produce 5 million tons of LNG a year, Ellinas said. Construction will cost $6 billion, while the second and third trains will cost $3 billion each, he said.

The six Cypriot exploration permits awarded so far may hold as much as 40 trillion cubic feet of gas, according to Ellinas. The government has other blocks yet to be licensed.

– Anna Shiryaevskaya, Copyright 2013 Bloomberg.

Tags:

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up
Back to Main
polygon icon polygon icon

Why Join the gCaptain Club?

Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.

Sign Up
close

JOIN OUR CREW

Maritime and offshore news trusted by our 104,727 members delivered daily straight to your inbox.

Join Our Crew

Join the 104,727 members that receive our newsletter.