Cyprus energy suppliers face competition in export deal to Egypt

British energy outfit BG Group are currently desperate to secure gas supplies for their natural gas facilities in Idku, Egypt, which are operating at below capacity. The Idku plant has a capacity of around 7.2 million tonnes of liquid natural gas each year, but is currently working with around 2 million tonnes.

Cyprus energy suppliers face competition in export deal to Egypt

British energy outfit BG Group are currently desperate to secure gas supplies for their natural gas facilities in Idku, Egypt, which are operating at below capacity. The Idku plant has a capacity of around 7.2 million tonnes of liquid natural gas each year, but is currently working with around 2 million tonnes.

Negotiation talks in Nicosia suggest potential natural gas deals; although it is the energy companies that will ultimately have the final say, according to energy expert Charles Ellinas. BG are exploring a number of options to fill the growing deficit of natural gas, with Cypriot gas from the Aphrodite field being one of the options.
Aphrodite could produce anywhere from 3.5 to 4 million tonnes a year, and if plans develop could channel by pipeline from the Aphrodite reservoir to Egypt. The earliest date to complete the project would be late 2019, Mr Ellinas said. It is less money intensive than onshore or marine-based natural gas and, given falling natural gas prices worldwide, would make more economic sense for Noble Energy, operators of the Aphrodite field.

If Noble Energy comes to an agreement to pipe the bulk of the Aphrodite gas to Egypt, the revenues from the contract might then make it worthwhile to construct an additional pipeline running from offshore Block 12 to the southern coast of Cyprus, currently supplying small quantities of gas for domestic electricity.

Noble has been discussing various scenarios with BG as well as with the Cyprus Hydrocarbons Company. But when it comes to supplying BG's export plant, Cyprus faces competition. And BG has also been talking with BP to link their two gas developments off Egypt's coast. BP's North Alexandria gas field is expected to come online next year, far sooner than Cyprus' Aphrodite field and could provide BG's plant with up to 2 million tonnes of liquid natural gas each year.


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