Representing President Christofias at the 2012 Prague Energy Storage Summit, the Presidential Secretary stated that Cyprus occupies a unique strategic position in the Mediterranean. Coupled with the recent discovery of large-scale natural gas reserves in the region and Cyprus's natural gas export plans, this makes Cyprus a new, fully flexible natural gas (LNG) storage hub for Europe and even the world.
Multiple global companies apply to supply natural gas to Cyprus
According to the Cyprus Mail, the Cyprus Natural Gas Company launched a formal tender for a 5-year natural gas supply in September, with at least 17 companies submitting bids. After a three-week evaluation of the companies' proposals, the scope of negotiations will be narrowed down, ultimately leading to the signing of sales agreements. In addition to providing fuel supply, the supplier is also responsible for arranging the relevant infrastructure. Furthermore, open tenders are being conducted for other related technologies such as liquefied natural gas (LNG) and compressed natural gas (CNG).
In early November, the Cypriot government announced some of the exploration rights for offshore natural gas blocks, which is part of the second round of tenders to be released in February next year. In the second round of tenders for the Exclusive Economic Zone (EEZ) released by the government in May this year, a total of 5 sole-proprietorship companies and 10 joint ventures submitted bids. The exploration licenses issued this time are mainly for four adjacent blocks located in the north and northeast of Block 12, namely Blocks 2, 3, 9, and 11. The winning companies are Italy's Eni and Korea Gas Corporation (Blocks 2 and 3), and a consortium consisting of France's Total, Russia's Novatek, and GPB Global Resources (Block 9). Additionally, France's Total was awarded independent exploration rights for Block 11.
Cyprus will negotiate exploration agreements with the aforementioned companies in the coming months and agree on specific exploration timelines. It is expected that after the successful negotiation and signing of contracts, the government will receive at least 200 million euros in signing bonuses, and the natural gas industry will significantly boost the economic development of Cyprus.
Cyprus's natural gas reserves may far exceed expectations
According to the Cyprus Mail, the head of Noble Energy in Cyprus stated that the oil and gas reserves in Block 12 may far exceed the initial forecast of 7 trillion cubic feet. The company will conduct exploration in the first and second quarters of 2013 based on the conditions of appraisal wells and drilling equipment, and will detect oil beneath the natural gas layer. The official stated that based on geological analysis, oil must exist in this area; it is only a matter of detecting the specific location, depth, and reserves.
In addition, Noble Energy is negotiating with the government to build an LNG plant in Vasiliko, which is expected to have an annual processing capacity of 5 million tons of natural gas from Block 12 once completed. A key point is that the LNG plant needs to have the capacity for future expansion of production and output, as the plant will not only cover all blocks within the Cyprus EEZ in the future but will also encompass the processing and production of natural gas from other parts of the Eastern Mediterranean, including Israel.
