Delek raises Cyprus gas estimates
Noble Energy’s Israeli partners have raised their estimate for the amount of natural gas in Cyprus’ Aphrodite (Block 12) reservoir by 14 billion cubic meters (bcm), although the increase falls well short of rendering viable a land-based liquefied natural gas (LNG) plant.
The firms also raised the estimated number of barrels of condensate (a liquid by-product of natural gas production that can be sold separately) at the Aphrodite field.
The increase resulted from an exchange of information between Israel and Cyprus, or more precisely, between the partnership in the adjacent Israeli Ishai prospect and the partnership in Aphrodite in Cyprus.
The new estimates are 127bcm of gas, up from 113bcm, and nine million barrels of condensate, up from 8.1 million.
The new gas estimate corresponds to roughly 4.5 trillion cubic feet (tcf). Despite the 12 per cent increase, the revised numbers still do not come close to the minimum amount of gas which Noble Energy – operator of the Aphrodite prospect – says is needed to make an onshore LNG plant commercially feasible.
During a conference call with the media in December last year, Noble’s Senior Vice Chairman for the Eastern Mediterranean Keith Elliott said the threshold would have to be “well north of 5.5 tcf…preferably between 6 and 7 tcf.”
As Israeli news outlet Globes – which first reported the Aphrodite field upgrade – observes, the quantity is not enough to justify the development of the reservoir for domestic use. In order to justify its development, some of the gas produced must be exported.
“Constructing a facility for producing liquefied natural gas (LNG) is very expensive; the cost could reach $10 billion…On the one hand, gas consumption in Cyprus does not justify development of Aphrodite; on the other hand, exporting the gas in liquid form requires larger quantities,” Globes said.
According to Noble’s latest official estimate of the Aphrodite play, the reservoir holds gross resources ranging from 3.6 trillion tcf of natural gas to 6 tcf, with a mean of approximately 5 tcf.
This leaves pipelines the principal option for Cyprus at the moment. During a conference in Nicosia earlier this month, the Texas-based company itself said it is now favouring regional pipelines over land-based or marine-based LNG.
In a related development, the Natural Gas Public Company (DEFA) will reportedly be concluding soon its assessment of tenders received for natural gas supplies to Cyprus – known as the interim solution.
Phileleftheros reports that the three remaining bidders – M&M, Vitol and Delek – will submit their final financial offers later this week.
According to the daily, DEFA’s board is to meet next Tuesday to open the financial offers.
Through DEFA, Cyprus is seeking natural gas supplies for domestic power generation until the island’s own reserves become available. Under the tender, the date of first gas supply must fall between January 1, 2016 and June 30, 2017. The supply period is between seven years, with the option of extending this to up to 10 years.
- Cyprus Mail
- Published on:
- November 19, 2014
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