Cyprus, Egypt in talks on gas pipeline

gas pipeline

Natural gas piped from Cyprus can either be used in Egypt or exported to Europe.

Egypt and Cyprus have agreed to start talks on building a natural gas pipeline from Cyprus to gas liquefaction facilities in Egypt, Egyptian website energyegypt.net reports. The report said that agreement on the talks was reached during an official visit by Egyptian President Abdel el-Sisi to Cyprus on Monday. The discussions will begin in December.

The planned pipeline will be hooked up to the existing pipeline that connects the gas fields in Egypt to that country's liquefaction facilities in Idku and Damietta. From there, the natural gas can be either used in Egypt or exported to Europe. The facilities are operated by Royal Dutch Shell and Union Fenosa Gas (UFG), a jointly owned subsidiary of Italian company ENI and Spanish company Gas Natural, so the agreements, if any are reached, will be signed with these companies, not with Egypt.

Cyprus's Aphrodite gas reservoir is located only 30 kilometers from Israel's Leviathan reservoir. Energy sector sources believe that Leviathan can be connected to the Cypriot pipeline in order to export gas to Egypt. This is a more likely and economically practical option than laying a gas pipeline just for the Aphrodite reservoir.

Aphrodite is a relatively small and still undeveloped reservoir. The 120 BCM of gas that it contains probably cannot provide economic justification for laying a 300 kilometer pipeline to Egypt. Cyprus does not currently consume natural gas, but its potential consumption is estimated at 1 BCM a year. In other words, when Aphrodite is developed, Cyprus will consume 30 BCM in the next 30 years, leaving Aphrodite with 90 BCM for exports.

The report also stated that Egypt will buy the entire quantity of gas offered by Cyprus. Egyptian Minister of Petroleum Tarek el-Molla caused a sensation among investors in gas shares last week by saying that Egypt would stop importing liquefied gas in 2018, and would then begin exporting gas following the beginning of production at the huge Zohr reservoir discovered off the Egyptian coast.

Published by Globes [online], Israel Business News - www.globes-online.com - on November 22, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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