The Aphrodite natural gas field off Cyprus is commercially viable, the partners behind the project said yesterday, and plans call for the production of eight billion cubic meters a year and construction of a pipeline to Egypt.
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Cyprus, which required an international bailout in 2013, is hoping for an economic turnaround based partly on offshore reserves.
Texas-based Noble Energy and Israel’s Delek Group discovered the deposit, estimated to hold 128 BCM of gas, in Cyprus’s offshore Block 12 in 2011. It also contains nine million barrels of condensate.
Shares of Delek Group rose 2.8% on the Tel Aviv Stock Exchange yesterday to 1,151 shekels ($298).The two subsidiaries that hold Aphrodite directly also rallied, with Delek Drilling gaining 3.4% to 3.26 and Avner up 3.2% at 17.57.
Plans call for a floating production, storage and offloading vessel to process eight BCM of gas a year and the construction of underwater pipelines connecting the well to Cyprus and Egypt, Delek said in a statement.
The planned Egyptian exports were made possible by a cooperation agreement signed by the countries in February, Delek said, adding that the partners would submit their plans to the Cypriot government in the near future.
Noble is the project operator with a 70% stake. Delek holds the remaining 30% through two subsidiaries, but is in early-stage talks to buy an additional 19.9% for about $155 million.
Cyprus is seeking to develop its energy sector to bolster an economy that relies mostly on tourism, business services and shipping. The island has, for now, shelved plans to create its own liquefied natural gas terminal.
Noble and Delek are also seeking to sell gas to Egypt. A group of private customers in Egypt agreed in March to buy at least $1.2 billion of natural gas from Israel’s offshore Tamar field, which is controlled by the two companies.
They have also been negotiating two larger export deals with foreign operators of liquefied natural gas plants in Egypt to sell them gas from their bigger offshore field, Leviathan, but those deals have been on hold until Israel’s Antitrust Authority makes a final decision on whether to break the two companies’ control over most of Israel’s gas resources.