Energean pursues to supply natural gas to Cyprus

Energean pursues to supply natural gas to Cyprus

On Tuesday, 19th November 2019, Greek oil company and UK-listed, Energean Oil & Gas, stated that its Energean International Unit submitted an application to import and supply natural gas to Cyprus as early as 2021 (https://www.reuters.com/article/us-energean-oil-cyprus-natgas/energean-seeks-to-supply-natural-gas-to-cyprus-from-israel-idUSKBN1XT1EI).

Energean sought to supply gas through a 215 km (135 miles) pipeline from the Karish block offshore Israel, a field containing 25 billion cubic meters of discovered recoverable resources, to Vassiliko, in Cyprus (https://in-cyprus.com/energean-seeks-to-supply-natural-gas-to-cyprus-from-israel/).

The oil and gas company declared that the total investment, which they will fund, will amount to circa USD 350 million. This will enable Cyprus to receive competitively priced natural gas from 2021, given that there are no delays in permitting procedures.

The significance of this move is exemplified by what the CEO of Energean, Mr. Mathios Rigas stated, “Energean’s proposal offers the Republic of Cyprus the option to switch to natural gas as soon as possible, and under the most competitive terms. Execution of the proposal will bring competition to the Cypriot natural gas market, decrease energy costs across the economy and result in enhanced diversity and security of supply” (https://cyprus-mail.com/2019/11/19/greek-oil-company-applies-to-pipe-gas-to-the-island/).

He also added that their “proposal…is supplementary to the LNG import procedures launched by the Cypriot government”, and that they expect “Cyprus will take advantage of the options that the market offers for the benefit of the Cypriot economy and the consumers” (https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/111919-uk-listed-energean-proposes-gas-pipeline-to-cyprus-from-israeli-field).

Energean, seeking to diversify its offtake footprint beyond Israel, has also already signed letters of intent with all three power producers (IPPs) – Power Energy Cyprus, Lysarea Energia and Paramount Energy Corporation – that have been granted a license to construct combined cycle power plants, in Cyprus.

It should be noted that the company has already signed firm gas sales purchase agreements with Israeli IPPs and industrial consumers (https://cyprus-mail.com/2019/11/19/greek-oil-company-applies-to-pipe-gas-to-the-island/).

The Floating Production, Storage and Offloading Unit (FPSO) ‘Energean Power’ has the capacity to process 8 billion cubic meters of gas annually, and Energean has already signed contracts to supply 4.7 billion cubic meters a year, to major industrial consumers in Israel, starting in 2021 (https://www.stockwatch.com.cy/el/article/energeia/energean-aitiseis-gia-fysiko-aerio-stin-kypro).

In light of a trilateral cooperation agreement between Cyprus, Israel and Greece, to transport natural gas to Europe through the East Med Pipeline, Energean stated that this move could further strengthen Cyprus’ role in the Eastern Mediterranean region (https://www.reuters.com/article/us-energean-oil-cyprus-natgas/energean-seeks-to-supply-natural-gas-to-cyprus-from-israel-idUSKBN1XT1EI) (https://www.nsenergybusiness.com/projects/eastern-mediterranean-pipeline-project/).