South Cyprus’ plans to sell its offshore gas to Egypt are most likely stumped, following the announcement of a 30 trillion cubic feet (tcf) gas find off the coast of Egypt by Italian energy company ENI.
‘Cyprus Mail’ comments that despite the Greek Cypriot government putting on a brave face about ENI’s latest discovery, Egypt will no longer want to import gas from Cyprus.
However, Energy Minister Giorgos Lakkotrypis has dismissed this idea, saying that he had spoken to his Egyptian counterpart on Monday and that plans to export Cyprus gas by an undersea pipeline remain in place.
In addition, he noted that since the ‘Zohr’ field lies close to three of the South’s licensed offshore blocs (10, 11 and 12), that could mean further discoveries of gas on the Cypriot side.
Should the ‘Zohr’ discovery be verified, this would have “geological, geopolitical and commercial ramifications,” he said, but energy expert Charles Ellinas says that it is too little, too late.
“Our plans to sell natural gas to Egypt, always financially non-viable, are now completely scuppered,” Ellinas told ‘Cyprus Mail’.
“To call ENI’s 30 tcf ‘Zohr ‘prospect a game-changer is an understatement,” Ellinas said. Not only does the new find negate Egypt’s need to import Cypriot gas, but Israeli gas as well.
Egypt no longer has any reason to pay a premium for importing gas from either Cyprus or Israel, when it has its own gas.
So what will be the South’s next move? Ellinas says the government urgently needs to formulate a Plan B for developing the ‘Aphrodite’ field.
There are two options: a pipeline to Turkey, and then possibly onto Europe; or combining the resources of Leviathan and South Cyprus’ Aphrodite fields via an LNG plant in Cyprus for export to Europe.