Greek Cypriot leader Nicos Anastasiades met with Israeli energy giant Delek Group owner Yitzhak Tshuva during his visit to Israel on Sunday to discuss the development of the offshore Aphrodite gas field, which is located in block 12 of the Cyprus’ Exclusive Economic Zone (EEZ) in the eastern Mediterranean.
During their meeting, Anastasiades and Tshuva reportedly discussed the possibility of building an independent floating production storage and offloading (FPSO) unit in the area and the merging pipelines from Israeli and Cypriot gas reserves to export gas in the eastern Mediterranean to Egypt.
Earlier this year, the Greek Cypriot administration and Egypt signed a Memorandum of Understanding to outline the technical details of an undersea pipeline in order to supply the BG Group-operated network in Egypt’s Idku or Damietta ports with gas imports by early 2018 from the Aphrodite gas field.
The agreement, which was signed between Cyprus’ CHC Company and the Egyptian Gas Holding Company (EGAS), will also include other companies involved in gas transport and processing - with a deal expected to be reached in six months.
Anastasiades and Tshuva talked about Delek’s plans to increase its stake in the Aphrodite gas field to 49.9 percent, up from its previous share of 30 percent, with the remaining share belonging to the Texas-based energy firm Noble Energy.
According to Cyprus Mail, Anastasiades additionally agreed with Israeli Prime Minister Benjamin Netanyahu to instruct Israeli energy minister Yuval Steinitz and his Greek Cypriot counterpart Giorgos Lakkotrypis to agree terms on a unitisation deal to regulate the exploitation of gas located along the shared sea-borders of their EEZs, where the Aphrodite field is located.
The discovery of the Aphrodite reserves in 2011 raised hopes in Europe of an alternative gas source, as the continent continues its efforts to diversify its supply away from Russian gas.
Feasibility studies for a 1,200 kilometre-long underwater pipeline from Cyprus to Greece are ongoing, but a number of experts have dismissed the idea due to the 2,000-metre depths of the sea along the proposed route as well as the high seismic activity in the region.
Earlier this month, Greek Cypriot Energy Minister Giorgos Lakkotrypis told the Turkish daily Milliyet in an interview that natural gas from the Aphrodite field could go to the European market through Turkey if there is a solution to the island’s 40-year dispute with the Turkish Cypriots.
The Greek Cypriot administration in southern Cyprus in February decided not to proceed with a proposed deal with the reservoir’s main shareholders - Noble Energy and Delek Group - to import gas from Israel’s offshore Leviathan gas field in the eastern Mediterranean.
Noble Energy and Delek Group, which also operate the Aphrodite gas field, had originally proposed that Cyprus imports 700-950 million cubic metres (mcm) of natural gas per year from the Leviathan field, which had a proven capacity of at least 621 billion cubic metres in April 2014.
However, the parties failed to reach a binding agreement by a August 21, 2014, deadline after evaluating the financial costs of the project, including a proposed pipeline from Leviathan.
Noble Energy and Delek Group had planned to develop the Cypriot reserves in the Aphrodite field and the Israeli reserves in the Leviathan field simultaneously with the aim of getting them both online by early 2018 at latest.
These plans veered off-track, however, when Israel’s Antitrust Authority Commissioner David Gilo declared Noble Energy and Delek Group an “illegal cartel” in December, thus freezing all work on the Leviathan field.
The decision by Gilo to break-up the joint monopoly is expected to result in one or both of the firms selling their stakes in Leviathan, or alternatively in the nearby Tamar reservoir, thus leading to a delay in the start of operations by at least two years.
At present, Noble Energy owns a 39.66 percent stake in the Leviathan gas field, while Delek Group subsidiaries Delek Drilling and Avner Oil Exploration own 22.67 percent each. The remaining 15 percent is owned by Ratio Oil Exploration.
Joint power grids
Israeli and Greek Cypriot officials present at the meetings in Israel on Sunday also discussed plans to connect the power grids of Cyprus, Israel and Greece via the world’s longest bi-directional subsea cable.
With construction due to begin in 2019, the €4 billion EuroAsia Interconnector joint project by companies DEH Quantum Energy and Israel Electric Corporation Ltd. (IEC) will allow electricity to reach remote Greek islands in the Aegean Sea.
The project, which is due to be completed by 2022 within the framework of a European Project of Common Interest (PCI), will see a 400 kV DC underwater electric cable connect transmission networks in Israel, Greece and the eastern Mediterranean island of Cyprus.
The cable will have a capacity of 2000 MW and will cover a total distance of around 1,518 kilometres, running from Hadera, Israel, to Athens, Greece, through Vassilikos in southern Cyprus and the Greek island of Crete.