The development and production plan for the Aphrodite reservoir submitted by the Block 12 partners makes no mention of potential natural gas sales to or via Turkey, nor does it propose a linkage of Cypriot and Israeli pipelines to a common destination, which is understood to be Egypt.
According to daily Politis, the 300-page blueprint confirms the partners’ preference to utilise an FPSO (floating production, storage and offloading) vessel.
An FPSO is a platform producing and treating the gas on-site. The gas is either piped to receiving terminals or compressed and loaded onto ships.
The newspaper said also that first gas production from the reservoir is anticipated in the 2019-2020 timeframe.
In the meantime, Politis reported, a feasibility study for a Cyprus-Egypt pipeline (the two countries have signed an MoU) is expected to be concluded by the end of this month.
Israel’s Delek Group released a statement, noting that the proposed outline for development of Aphrodite is based on its 2014 annual report.
Delek noted, among others, that the “outline development plan is a necessary but insufficient condition to classify the contingent resources of natural gas and condensate in the Aphrodite reservoir as reserves.”
Delek’s 2014 annual report does provide a general idea of the road map.
The report, published on March 30 this year, states that the Block 12 partners plan “to establish an independent floating production facility in the Aphrodite reservoir area with an estimated daily capacity of 800 mmcf [million cubic feet]… sell natural gas at the exit point of the floating facility, and transport it in an offshore pipeline to the target markets.”
The target markets cited are Cyprus and Egypt.
The report further notes that “according to the operator’s initial estimation sent to the partnerships and the Cypriot government, and prior to completion of a techno-economic test plan, including full engineering design (FEED), the estimated cost of the outline of the development plan, excluding costs of constructing the pipeline to the target markets, is between $3.5bn and 4.5bn (in terms of 100 per cent).
“It is emphasised that this cost includes the cost of purchasing the floating facility, but the partners intend to examine the option of leasing it for the production period of the reservoir or part thereof so as to substantially reduce the initial development costs.”
The same report states that the operator (Noble) estimates to reach the stage of the final investment decision by “the end of 2016.”
It adds: “According to the outline of the development plan, and subject to the Cypriot government’s approval of the development plan in the first half of 2015 and compliance with the preconditions set out above, the planned commencement date of supply of natural gas from the Aphrodite reservoir is the first half of 2020.”
Now, Cypriot authorities have 90 days in which to comment on the development plan. Should any disagreements emerge, the two sides will engage in talks.
But it’s understood that the government and the Block 12 partners already see eye to eye on most of the plan’s key aspects.
The Aphrodite prospect holds some 4.5 trn cubic feet of natural gas.