Cyprus Aphrodite striving to be ‘commercial’ later this year!

Aphrodite will be ‘commercial’ later this year

SRAEL’S Delek, Noble Energy’s partner in the Block 12 concession, estimates that initial production at the Aphrodite gas field will be in the order of 800 million cubic feet per day.

According to a financial statement filed this week on the Tel Aviv Stock Exchange, in the second half of the year the Aphrodite partners plan to submit to the government a notice declaring the reservoir ‘commercial’ along with a development plan.

“The partners in Block 12, together with the government of Cyprus, are examining options for the development of Block 12 which will enable the supply of natural gas to the local market in Cyprus, as well as the export of natural gas via pipelines to other markets, including Egypt,” Delek said.

“This will include a preliminary plan for the establishment of an FPSO with an estimated initial production capacity of approximately 800 mmcf/d.”

An FPSO (floating production, storage and offloading) vessel is a platform producing and treating the gas on-site.

The gas is either piped to receiving terminals or compressed and loaded onto ships.

As they are targeting regional markets for the Aphrodite reserves, Delek and Noble appear to have ruled out liquefied natural gas (LNG) technology.

The Aphrodite prospect holds 4.5 trillion cubic feet of natural gas.

Meanwhile, news outlet Sigmalive, citing sources, said that Noble is looking to farm out part of its stake in Block 12.

There could be developments on this front within the next few months, the same sources told Sigmalive.

Noble itself, in an 2014 annual report filed recently to the SEC, noted that “there is also potential for a farm-out arrangement of our working interest.”

The Texas-based outfit has a 70 per cent working interest in Block 12; Delek Group energy exploration units Avner Oil and Delek Drilling Limited Partnership own 15 per cent each.

It’s understood Noble has long been seeking a strategic partner in the concession.

In April of 2013 Noble, having opened its so-called ‘data room’ – access to information relating to the Aphrodite gas prospect – received interest from several companies and/or consortia, after which it shortlisted five companies as possible partners, including ENI and Total.

In an earlier report by the Mail, energy expert Charles Ellinas said that Noble tends to keep around 40 per cent of its working interest in concessions, thus spreading the risk – standard practice in the industry.

To date, Cyprus’ only proved gas reserves consist of the findings in the Aphrodite reservoir. Explorations by ENI-KOGAS and French oil giant Total in their respective concessions have so far failed to discover commercially exploitable quantities of hydrocarbons.

Declaring a prospect commercial is an important stage, marking the transition from prospecting to development. But it is a long way off monetisation, as the concession holders must first finalise infrastructure and engineering designs, conclude gas sales and line up the financing. The final – and most crucial – step is the Final Investment Decision (FID).

Source: Cyprus Mail