THE SHEER logistics of building and operating a liquefied natural gas (LNG) plant in Cyprus would require far longer than the four to five years frequently cited – try a decade.
Speaking at a roundtable discussion organised by the European Rim Policy and Investment Council (ERPIC) in Nicosia yesterday, Peter Wallace called for a “reality check”, pointing out that the site at Vassilikos earmarked for the plant is way too small for a facility of that size.
Wallace, an engineer and energy consultant with more than 30 years of experience in the oil and gas, petrochemical, and power generation sectors, argued that a plant with a capacity of 15 million tonnes per annum (mpta) might take up to a decade before it’s up and running.
Based on the estimated natural gas reserves in Cyprus’ Block (3 to 9 trillion cubic feet according to Noble Energy), the ideal facility would need to have a capacity of 15mpta, with three trains of 5mpta each.
The LNG plant would be located between the Vassilikos power station and the village of Mari. Together with Vassilikos, the facility would comprise the sprawling energy centre which the government plans to build in the area.
For a number of reasons (technical and safety-related) the facility’s width would span several kilometers – but that kind of real estate is simply not available at the proposed site.
“Sure, you could cram it all in there if you wanted to, but I wouldn’t advise it,” said Wallace.
For one, the massive trains (the liquefaction and purification facilities) would have to be separated by a sizeable distance, so as to minimise the risk of total failure or hazard in the event of an emergency or malfunction.
Also, there’s the question of making a facility future-proof. Wallace noted that in the event of more gas discoveries in Cypriot waters, additional trains would have to be built, requiring even more space.
In fact, the LNG plant would virtually border the village of Mari, while ideally it should be located at least 100 to 200 meters from the highway.
Noble Energy, the Texas-based company which is conducting offshore exploratory drilling, has also floated the idea of building an LNG plant on the island to process and store gas both from Israeli and (potential) Cypriot finds.
It’s understood that Noble Energy has first-hand knowledge of the site and is conducting feasibility studies.
And Noble believes it can deliver within 44 to 48 months, though the plant would have two trains.
To drive his point home, Wallace said also that the typical order-to-delivery timeframe for a single refrigerant compressor is typically 31 months. The compressors, a key component of an LNG plant, are custom-made and not available off-the-shelf. And for a 15mpta plant, you’d need nine of these.
There is also the question of the huge workforce needed for such a project. Local authorities would need to worry about accommodating thousands of workers.
As a workaround, Wallace suggested that the project be modularised, where the work required at the main construction site would be reduced by building at one or more prefabrication and preassembly sites elsewhere.
Drawing on data from the energy industry, Wallace estimates the minimum cost of a 15mpta plant could reach $18 billion, the maximum $24 billion. For an offshore plant, the respective figures are $27 billion and $32 billion. And that’s not counting the pipeline from the well.
Thus a better option might be to build a floating LNG plant, which would have the added bonus of allowing for more space for the massive tankers to dock with the facility.
