Aphrodite Gas Field to Address Domestic Gas Demand in Cyprus

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The expected delay in the development of the Leviathan due to a dispute between the partners in Israel’s giant gas field and the antitrust regulator has prompted Cyprus to look for indigenous solutions to meet its demand at home. Cyprus had launched a tender stipulating that the first supply from the Leviathan to Cyprus must happen between January 2016 and June 2017, a time frame unlikely to coincide with production from the Leviathan.

The government of Cyprus is now studying the possibility of supplying the domestic market with natural gas from its own Aphrodite field, located in Block 12 of Cyprus’ Exclusive Economic Zone and estimated to hold 4.54 Tcf of natural gas. The Cypriot government is currently in talks with Texan Noble Energy over the development plan of the Aphrodite field. Noble Energy controls 70% of the field, with Delek Drilling and Avner Oil Exploration, subsidiaries of Israel’s Delek Group, each owning 15%.

Cyprus has been struggling to develop the necessary infrastructure to export the gas encountered off its coast. The negligible size of its domestic demand for natural gas means that most of the gas discovered in Cypriot waters will be allocated for exports. More gas will however need to be found before the island can justify the commercial viability of an onshore LNG terminal on its Vassilikos coast. Other options include exporting to gas to the regional market, namely to Jordan and Egypt.

The ENI/KOGAS consortium is pursuing its exploration activities in Block 9 of the island EEZ. Successful results would encourage the development of the island’s resources and its entry into the export market. TOTAL was also schedule to commence exploration activities in Blocks 10 and 11 of Cyprus’ Exclusive Economic Zone. The French giant has however postponed the start date of its activities offshore Cyprus for not having identified drilling targets.

Despite the small gas demand in Cyprus, the Aphrodite field may be developed by Noble to supply the Cypriot market with a cheap source of gas. Selling the gas to Egypt’s BG plant in Idku would justify the commercial development of the field. This scenario has increased in probability in light of the recent regulatory hurdles that may impede the development of Israel’s Leviathan field and hence the completion of the deal to supply BG’s plant in Egypt with gas from Israel’s Leviathan.

Source:  www.naturalgaseurope.com