NICOSIA, Cyprus (AP) — Two major international oil and gas companies have so far expressed interest in Israeli-Cypriot plans to build a pipeline that would convey offshore natural gas from both countries to Cyprus where it would be liquefied for export by ship, a Cypriot official said Tuesday.
Energy Minister Giorgos Papanastasiou told The Associated Press in an interview that the plan will be pitched on May 29 to energy companies involved in hydrocarbon exploration off Cyprus’ southern coast and other firms involved in pipeline and gas processing plant manufacture.
Getting energy companies on board is essential to get the project off the ground, and Papanastasiou will also present it individually to each firm in order to secure their backing.
Papanastasiou said the project’s key drawing card for energy companies is its low cost relative to other exporting methods, such as an idea for a 6-billion-euro (($6.5 billion), 1,900-kilometer (1,180-mile) pipeline connecting east Mediterranean gas deposits directly to Europe.
That relatively low cost would mean companies would recover their initial investment and turn a profit much quicker.
The roughly 320-kilometer (200-mile) pipeline is estimated at 450 million euros ($489 million) and the liquefaction plant at 1 billion euros ($1.1 billion).
Papanastasiou said there’s another option for a liquefaction plant aboard a ship instead of an onshore facility. But he said new, modular technology used to construct an onshore facility has the advantage of adding or subtracting modules to accommodate more or less capacity, depending on the supply of gas that’s needed.
The modules for the onshore plant would be built abroad and shipped to Cyprus for assembly.
Israel and Cyprus are already working on finalizing a deal for the project and Papanastasiou is expected to head a delegation to the neighboring country for detailed talks in the middle of next month.
Once the Israel-Cyprus agreement is finalized and energy companies sign up, a tender process will open for the construction of both the pipeline and the processing facility.
Some of the gas conveyed to Cyprus would be used for domestic power generation in order to reduce energy costs for consumers, Papanastasiou said.
Liquefying natural gas for ship-borne export offers more options regarding markets. Although Europe is the primary target market, Asia could also factor in, according to Papanastasiou.