Gas pipeline from Cyprus to Egypt gaining steam

Four major investment firms have expressed an interest in financing the construction of a pipeline that would transport natural gas from Cyprus to Egypt, Bloomberg reported.

The banks and investment houses asked the Cypriot government for more information on the progress of the Aphrodite reservoir, whose gas Royal Dutch Shell Plc is considering buying for its facility in Egypt, Sofronis Papageorgiou, head of commercial affairs at the Cypriot embassy in Israel told Bloomberg, though he declined to disclose the names of the firms.

The interest from the potential investors is “another sign that things are moving in a positive direction,” said Papageorgiou.

Egypt and Cyprus signed an intergovernmental agreement last month for the construction of an underwater pipeline to export natural gas to Egypt.

The pipeline is estimated to cost between $800 million and $1 billion, Egyptian Petroleum Minister Tarek El Molla said in May.

The agreement is meant to facilitate the mooted construction of a pipeline from Cyprus’ Aphrodite gas field onto Egyptian shores and then to the LNG facility in Idku, which the owners of the gas pool – Shell, Texas-based Noble Energy Inc. and Israel’s Delek Drilling LP – continue attempts to hammer out a contract for.

The Aphrodite field, the first in Cypriot waters, has sat undeveloped since its discovery in 2011, and is estimated to contain around 4.5 trillion cubic feet (130bn cubic metres) of gas.

There are still obstacles to clear before the energy firms sign a deal. The Aphrodite partners are renegotiating the government’s level of royalties. Israel and Cyprus are trying to resolve a dispute about the delineation of the border between Aphrodite and a neighbouring Israeli pool.

The countries’ energy ministries are making methodical progress on the disagreement, striving to avoid international arbitration that could delay a solution, Papageorgiou told Bloomberg.

Source: Bloomberg

 

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