THE GOVERNMENT is considering an interim supply solution for natural gas as it ponders longer-term supply offers or the potential of tapping its own possible reserves, Commerce Minister Antonis Paschalides said yesterday.
“The aim of such an interim solution is to bring natural gas to Cyprus as soon as possible,” Paschalides told newsmen yesterday after meeting Noble Energy’s CEO and President David Stover in Nicosia.
It was the first visit to the island by the Texas-based company, which has a concession to explore for hydrocarbons in an offshore field south-east of Cyprus.
Stover confirmed Noble’s plans to start drilling in the last quarter of this year in a 1,250-square-mile area known as Block 12 close to Israeli gas finds blocks. Cypriot officials believe the block could hold as much as 10 trillion cubic feet.
When pressed for more details on the interim solution, Pachalides clarified that this was an option but that no decision had been taken. He did reveal, however, that a Commerce Ministry advisory committee on energy matters is to meet next week to discuss various stop-gap solutions.
The minister declined to go into more detail, saying he needed to brief the President first.
Still, it was the first official admission that the administration is considering other alternatives to concluding a deal with Royal Dutch Shell for a 20-year supply of liquefied natural gas. Likewise it was the first solid indication that the prospect of the island tapping its own potential hyrdrocarbon reserves has forced a rethink of energy policy.
Stover said he and Paschalides discussed Cyprus law and EU regulations governing the protection of the environment. Stover said Noble, a company with considerable experience and know-how in deep-sea drilling, was very sensitive to matters regarding the environment.
Noble’s CEO said also that yesterday’s would be the first in a series of trips to the island.
Paschalides said they discussed ways of implementing the deal with Noble, but again did not go into details.
Amid EU concerns over fuel supplies due to the political turmoil in the Arab world, he said, Cyprus could serve as a secure energy transit point to Europe.
Paschalides said also that Gazprom and other oil giants are expressing strong interest in Cyprus.
In negotiations with the government last year, Shell had made the most competitive offer with a natural gas supply bid worth around €4.5 billion for a 20 year period, though no deal has been concluded.
In tandem with this, the state-run electric utility has compiled a short list of companies offering to build a land-based plant to process imported liquefied natural gas.
But critics have warned against Cyprus committing to a costly long-term supply contract while the island could be sitting on hydrocarbon wealth of its own.
Meanwhile Israeli company Delek, a partner of Noble in the Israeli gas finds, has proposed the creation of a liquefied natural gas facility on the island to process deposits Israel has discovered offshore and which Cyprus hopes to uncover.
Delek says such a deal would transform Cyprus from being totally reliant on gas and oil imports into a regional net exporter.
Cyprus and Israel have signed an agreement defining their sea border that allows them to forge ahead in the search for energy sources in the eastern Mediterranean
Cyprus has signed delineation agreements with Egypt and Lebanon, which have agreed to mutually exploit hydrocarbon deposits that criss-cross their boundaries.
