Natural Gas in Cyprus: Choosing the Right Option
Short Description
This policy paper examines Cyprus's choices regarding development of its new fossil fuel finds....
Description
MEDITERRANEAN PAPER SERIES
2013
NATURAL GAS IN CYPRUS CHOOSING THE RIGHT OPTION Anastasios Giamouridis
© 2013 Te German Marshall Fund o the United States. All rights reserved. No part o this publication may be reproduced or transmitted in any orm or by any means without permission in writing rom the German Marshall Fund o the United States (GMF). Please direct inquiries to: Te German Marshall Fund o the United States 1744 R Street, NW Washington, DC 20009 1 202 683 2650 F 1 202 265 1662 E ino@gmus.org GMF Paper Series
Te GMF Paper Series presents research on a variety o transatlantic topics by sta, ellows, and partners o the German Marshall Fund o the United States. States. Te views expressed here are those o the author and do not necessarily represent the views o GMF. Comments rom readers are welcome; reply to the mailing mailing address address above or by by e-mail to ino@gmus.org. ino@gmus.org. About GMF
Te German Marshall Fund o the United States (GMF) strengthens transatlantic cooperation on regional, national, and global challenges and opportunities in the spirit o the Marshall Plan. GMF does this by supporting individuals and instituinstitutions working in the transatlan transatlantic tic sphere, by convenin conveningg leaders and members o the policy and business communities, by contributing research and analysis on transatlantic topics, and by providin providingg exchange opportunities to oster renewed commitmentt to the transatlantic relationship. commitmen relationship. In addition, GMF supports a number o initiatives to strengthen democracies. Founded in 1972 as a non-partisan, non-prot organization organization through a gi rom Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides o the Atlantic. In addition to its headquarters in Washington, DC, GMF has ofces in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, Warsaw, and unis. GMF also has smaller representations in Bratislava, urin, and Stockholm. About the Mediterranean Policy Program
Te Mediterranean Policy Program promotes transatlantic transatlantic analysis and dialogue on issues aecting Southern Europe, North Arica, the L evant, and the Mediterranean basin. Priority areas include: understanding trends in Mediterranean societies; exploring opportunities or south-south cooperation and integration; research on key unctional issues aecting Mediterranean security and development; and strengthening the North American polic y debate on the region and transatlantic cooperation on Mediterranean strategy. strategy. GMF’s Eastern Mediterranean Energy Project addresses the political and economic implications, risks and opportunities GMF’s o the recent energy discoveries in t he Eastern Mediterranean region. It aims to promote the conditions or the peaceul developmentt o the new energy opportunities in the Eastern Mediterranean and to promote regional cooperation on energy developmen issues. See more at: www.gm www.gmus.org/pr us.org/programs/clima ograms/climate-energy te-energy Cover photo: An oshore exploration platorm. © AndrCGS
Natural Gas in Cyprus Choosing the Right Option Mediterranean Paper Series September 2013
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G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E Cx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F L R: T A A G D . . . . . . . . . . . . . . . . . . . . I A C D? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 S L R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Lk E Bf T Hz. . . . . . . . . . . . . . . . . . . . . . . . . . 9 Ex O . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 C C w I? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
A G Pö, / f. H x z, LNG, - w w . Bf j Pö, wk w Oxf I f E S, Gk P G C (DEPA), & PFC E, U.K. H f C.
T w k k G M F (GMF) S M L C B f x ff j, w C C f x f . T f f x f Hw R f Oxf I f E S (OIES) A M f Pö M C, w k k f. T . M k Pö M C w w , A Px, K T, O Nj, A Fw. T x G E G D Kzz, w j. T f w x k .
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The German Marshall Fund of the United States
Lqf
T w -6° C w f z f f :6 q w LNG k.
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T PSC w f w f w w . I PSC, E&P k. If f, f w w PSC.
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Natural Gas in Cyprus
iii
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The German Marshall Fund of the United States
1
Economic Contex C ontext t
T
x z C f f f x z (EEZ). T z k f f fw fw f . A f ’ q w f f f . . T T f f C w xz f f . Bw 5 8, R f C fw j f , w J 8. GDP w f .8 -- f f f 8. P f f , w C , , f , w 9 (-.9 ) T f x f k Gk , w f , C’ . I M , C F M Kk Kz , k , w f f C k “jk” M’ (fw S P’ J). T q f E F S F (EFSF) E S M (ESM), fw f C EU’ “C” “C” w w “R f C,” z . T “Tk “Tk R f N C,” w z Tk, w f “TRNC” C.
J , . I , ’ .4 . B M , C w f w f f z x. A k, f f , N A, w , , f E U (EU) I M F (IMF). T EU IMF C w - f € , j . T q f f ’ k EU 8. T w ff x. T C , f, f (.. €,) f C f k C. T, w wk , k . A k, C ’ . C f, , z x , f w . O k k, f ff f f j f .
F M L, Cyprus bailout and IsraelTurkey détente present new opportunities , 5 M , www. f.; f.; R, Factbox: outlines of Cyprus’s bailout by the euro zone , 6 M , www.. .
Natural Gas in Cyprus
1
F, w , w f f x w w f x f C f w . T w f f . E , w
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E, w w, f . A f w q f f ’ . B E w ’ ’ x .
The German Marshall Fund of the United States
2
First Licensing Round: The Aphrodite Gas Discovery
I
, f R f C Nw PGS k f C’ . S w ww x . PGS’ f, F 7, C f x (E&P) f ff k. Hw, -z . T (IOC) w C f , w.
A , f C w O 8 N E, -z E&P f U S, w (I). Fw wk ( D D ), f x x w Bk S . T 5-8 f w f ,7 .
A, Energy briefing: the oil and gas regime in the Republic of Cyprus, M , www.. ; J T, Noble Energy: Cyprus gas discovery , P F C E S, 6 J , www.. ; P, The World Energy Weekly , .5, O .
E w w , A ( ff f) f P, R, U.K., f . 4 C’ f w f Nw w 7 f; A, 59 f; Q, 885 f; R F ,575 f. 5
4
A E If A A (EIA), f q f f w x ; EIA, Glossary: proved energy reserves , 5 A , www.. . 5
Hw, Hw, f I C E M f w x E N Azj (9 45 f f ). If f BP S Rw, Natural gas: proved reserves , M , www. .. ..
Natural Gas in Cyprus
3
3
Is Aphrodite a Commercial Discovery
Commercial Viability
H
, A, f . I, f’ () (z) x w w . P P x f f j . E f f , f , f, f k . F - f , f j. Resource Base in Aphrodite/Block 12
T 5-8 f f f A f f f. T w f w C fw w f LNG . T f 6 f w jf f LNG x f w f 5 (). B f x f k . 6 Cf Cf f w f (.. 5 6 f ) 6
A w f qf . I z f E Af, D L f Oxf I f E S 8- f f 8 ( ) LNG f. T f w. F x, S 9 f Tz w qf f w. M D L, East Africa gas – potential potential for export , Oxf I f E S, M , www.xf. .
4
k, wz f f, w . I , 6 f q z w LNG . T f D f w Bk f f -5 f. 7 Hw, Hw, f f . Cf Cf f f 5-8 f A / f Bk A w w C’ x f (.. ff z ) f x f w f f f wf , f.8 Production Costs and Gas Quality at Aphrodite
Sf q A f . I, A ff f 8 k f C w f ,7 . I f x 7
O KRETYK’ w Bk A ff ff , f x C E, ’ CEO, E M Nw F f L (- A ), Cyprus’s offshore exploration: the current status and way forward ; E P, 8 τρις κ.π. βλέπει στο οικόπεδο ο πρόεδρος της ΚΡΕΤΥΚ, 4 J , www..; www..; S L, ΚΡΕΤΥΚ: επαφές με ΕΝΙ στο Μιλάνο, M , www.. . 8
I qf fwk, f wf z x j f “-” “-” , w , j.
The German Marshall Fund of the United States
Figure 1 – Basic parameters determining the commercial viability of a gas project
$.75 — f q . 9 Oil and Liquids Credits
Figure 2 – Basic breakdown of the revenue of a natural gas project
. . P P w US$ B T U () C I. Hw, k w w w , w
N w , .. q w f . S (f f ) “N G Lq” (NGL) , , , k. T fk . T f
9 F x, - f w $ f C ( w $) f Mzq. I , L f $ ( ) f Mzq w ’ G M P $6.4 f f - , T. M, f E M - M w I’ E C f f N’ j T f. T $5.75 . S D L, East Africa gas – potential potential for export export , Oxf I f E S, M , www.xf. ; N E, Analyst conference , 6 D , www.. www..;; A G, The offshore discovery in the Republic of Cyprus: monetization prospects and challenges , Oxf I f E S, J , www.xf. .
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Figure 3 – Basic breakdown of the cost basis of a natural gas project
f j. T x f w f. Important Milestones for Aphrodite’s Development
N E’ , w J , w f f A. D x q x . A w w f f , w f . Hw, f f f . . If f EIA, Glossary: natural gas liquids , 9 J , www..; Gz, Glossary: gas condensate condensate fields, 9 J , www.zf. .
C Nw A, Noble Energy starts A-2 appraisal drilling in Block 12 , 7 J , www... ; www... ; C M, Noble firms up drilling date , A , www.-. . .
6
T A’ f ( w k f ff ). ). S, f f Bk , A, w q .
C C w f A f LNG f F E E D (FEED) f f 5, fz f f f 5, f E, P, C (EPC) f 5. T F I D (FID) x 6, w f f .
M f f f C E, KRETYK’ CEO, E M Nw F f w k A -, L, Cyprus’s offshore exploration: the current status and way forward .
The German Marshall Fund of the United States
4
Second Licensing Round
New Licenses Under Cyprus’s Second Round
C
f f C’ w f . Uk f , w f IOC, , , LNG , f f k . L w w f f ff k f w ff (f w ) f q f . Off k , , 9 w w I j ENI w’ LNG , K KOGAS; Bk w w F j T. A f Bk 9 T, Nk Gz Bk f R, w f , f f ENI-KOGAS . B ( ) , k 9 f ff k C, w w q f A. 4 S k ff w w, ff f ( f ENI-KOGAS f ff k 5 6). T f
ff k w ENI D . 5 Prospects
T f ff k,. T f , , , , f x x . T f j . C (.. ff Bk , , 9, , , ) 4 f f , w 6 f C EEZ. 6 If f, w C w LNG j f, f q q A A f. I J , P S, CEO f ENI, f ENI x x f f 4. S f ENI w qf f C f . S, T ff x f Bk f f . T “f-” N E’ Bk . 7 T C wk f . If 5
S U O, Players’ warm response to Cyprus license round , 7 M , www.. ; Sk W, 15 στην κούρσα για άδειες ΑΟΖ, M , www. kw.. . 4
S E, Αισιοδοξία για τρισ κυβικά μέτρα φυσικού αερίου στην κυπριακή ΑΟΖ, 5 M , www.. ; P’, Cyprus call time on more license awards , F , www..; www.. ; M E E S, Noble Energy expects more gas in Block 12 , 6 O , www... www.. .
I C, No date for bidding , J , www... ; P’, Cyprus call time on more license awards , F , www..; www.. ; M E E S, Noble Energy expects more gas in Block 12 , 6 O , www... www.. . 6
C E, Cyprus’s offshore exploration: the current status and way forward , E M Nw F f, L, A -, . 7 M P, Αισιόδοξος ο Κασίνης με την έναρξη γεωτρήσεων και από το Ισραήλ, J , www. w.; w.; w f G, Total mulls buying Noble , Dk Bk , J , www... ; B, Cyprus studies LNG export expansion beyond $12 billion terminal , J , www.. .
Natural Gas in Cyprus
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f f ff k 4-5, w f f LNG f f 6, f A ff. 8
8 A f w k w q: • ENI T w (G&G) ; k w . • ENI T w f x w . • P x (f / ), ENI T w () f . • P f , w w f , .
8
The German Marshall Fund of the United States
5
Liely Economic Beneits and Time Horion
Structure of Economic Benefits
C
x f f , . T f ) f ) . G f j , , f , , f , w . D f C f w : w w w w f f f f . F 4 w f f C f EEZ. General Benefits for the Economy of C yprus Exploration and Production Operations
Ex w f f w. T w w k w f x . T f Nw’ , f x, x - f GDP, w 6, wk ( 8 ), f BI Nw B S. A 85 f j j 6 f GDP , .. Nw
q . 9 T x f Nw’ w k k N S U.K., w N Af M (w ) ).. Nw f w x ( ) w f f . T w Nw . I f , C f f x x x Bk k w ENI-KOGAS T. P P f f f x j , w f C k / w . Hw, x ff C k j GDP f k f x C. I f fwk, ’ H R D A w ff f , w wk f x . Hw, A
9
T , , ; & w; f ( ); . M f f A S A B (), Knowledge based oil and gas industry , R R , BI Nw B S, D f S L, www... www...
I.
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Figure 4 – Structure of economic benets in Cyprus from hydrocarbons developments
f C ff , k f x.
ff w IOC w C f.
A , C f f . . I f , , . T w w , k, x x f . C w ; f z f , ff ff ; f q f f w ff, , . T
D z f f GDP , w f C f. T w q f , , , . T C x. T f w w f .
T H R D A f C, Έγκαιρος εντοπισμός αναγκών απασχόλησης απασχόλησης και κατάρτισης κατάρτισης για αποτελεσματική διαχείριση του φυσικού αερίου στην Κύπρο, N , www... .
10
Gas Infrastructure Development
T f f ff f. T
F x, J , C x f C EDT Off. EDT € f f L. I f - N’ N’ Bk , w U U f N ff . If f E, Κύπρος: οκτώ π ρογράμματα ρογράμματα σπουδών για υδρογονάνθρακες, J ; C G Nw, Energy job boost , J , www.w.
The German Marshall Fund of the United States
f f; f ( ) - k ff f w C; f C wk ; f x f ( x LNG ). T H R D D A / / w . S 5 f f - k ff f w C. S wk w f f wk. Hw, f j w f qf (LNG ), w k wkf f 4, f . T f f z f A f 5 qf C, w f w Bk / f k ENI-KOGAS T. C w f f w f A ff / C’ ff k f f k j .
T k f z x C w f j C, w w wk j . N w . A C k z w , q f f wk. Improvements in Economic Competitiveness and the Balance of Trade
C x x ( f ) f w . . E- f C EU, EU, w f Dk. 4 T f , . If C E , f . F x, f C E f , C €. . T w f w , .. w - - f (, , ). 5 D , ff
T f f f / f f. D f w f x. I , f w j, f f q . M f f T H R D A A f C, Έγκαιρος εντοπισμός αναγκών απασχόλησης απασχόλησης και κατάρτισης κατάρτισης για αποτελεσματική διαχείριση του φυσικού αερίου στην Κύπρο, N , www... .
4
E’ E P, Electricity Industry and Electricity www.. . Households , 5 S , www... 5
T ff f f C, f f ( ) . F f f , f x Pö M C, How can small-scale LNG help grow the European gas market? , J , www... www.. .
Natural Gas in Cyprus
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Table 1 — General economic benets from hydrocarbons developments developments in ( w Cyprus ), x, C Opportunity When? Value? Ex P f k S (, , ( w f w €.5 ) k) €7.4 G f - Af - M () f f I C’ O C M .6 C f / x k I I O C M f k f C €. , f Bk , , 9 , . 8 €9 Sf f k (, ) . f T f C w . T f , , x f f , w f f. A A . 7 f f w ff , w T ff w f ’ f . f f . Tax Revenue
Direct Government Revenues Signature Bonuses
I F , €5 f ENI-KOGAS w 4 f T 6
M A G, The offshore discovery in the Republic of Cyprus: monetization prospects and challenges , Oxf I f E S, J , www.xf.. www.xf. . 7
LNG - — .. C — f . Hw, k LNG k , f - f - . T f f C x f f LNG k, w w f F S Rf U (FSRU).
12
I w w f C , x f f. T C w x f f wk ’ x . Tx w fw f - . Profit Sharing
C w f ( / ) . A f (M PSC) C F , C 8
P, Στα Στα ταμεία του κράτους 150 εκατ ευρώ από την ΕΝΙ, 5 F , www.w.. www.w..
The German Marshall Fund of the United States
w f ff k. T w f f w ’ x. T x f f- f- w j w C . ( w w x).9 T PSC q f f ( f q ) ) . F , f A f w - x 5 (7 ) f /LNG , w f $.8 f J f $4.7 ; $.7 f E f $.6 . Hw, ’ w f , w w (f ), , x , z, , f w k. C f x $4 f ( ) w $6 q f f - qf . 9
M f C, I, T, Model ExploExploration and Production Sharing Contract , N, F , www... ; ’ ’ w ff, A J .
A $ f (LNG k) F E, f f 65 , j q - f, LNG J J k, w f f k, w f C $8 . Hw, f w $5 f f LNG x $6 . C, C $ f C f LNG - . M, f w f , , /LNG k . T w ff k f f N, ENI-KOGAS, T. T z z w k . T z f f C w f f ..
L f f w f -- f j’ f. f. E f M f C, I, T Nk Sk f $. (€9 ) f z f A f f f w ; f z f C’ C’ f . M f F M, M, Cyprus natgas gains at 4 bln €a year, year, says Kretyk Kretyk , 5 A , www.f. . Q f BP, Statistical Review 2011, www... www...
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Table 2 – Direct hydrocarbons revenue opportunities for the government of Cyprus f w $ $
$8 f.
Opportunity
When?
Value?
S
W w k k
S k
Tx
D D -
R f
O C / x k
Pre-Selling Rights to Block 12
Hw, M k S f f S E Af ( ff Mzq) f f A LNG k, x f IOC .4
T C w, w , f A A f f . T - w EU IMF , z f A f, z , , f, . M, C’ f “ f” f w ff w x . R “f-” ff x. F x, E Af w w f IOC w f . T -f f ff Mzq (A 4),
S f x M E E S, Cyprus Energy Minister Minister says confirmation confirmation drilling drilling top top priority , M , www... www.. .
F- w f q f f wk ( w f , ).
14
I, I w A A W f ff L f. T f f Mz . T , w, $ f f $4 f L w LNG x
If f B, CNPC to buy stake in ENI Mozambique Mozambique assets assets for $4.2 billion billion, 4 M , www..; .; R, Mozambique Mozambique Oks PTT bid for Cove, Cove, despite Shell , 9 M , www.. . 4
F f f LNG z Tz Mzq, D L, East Africa gas – potential potential for export , Oxf I f E S, M , www.xf. ; ; f f x U O, Indians confirm Mozambique block deal , 5 J , www...
The German Marshall Fund of the United States
w . 5 T f w $9 $ f “f-” Bk 5
Hw, Hw, f ff ( w ) f f I’ x 4 f . A A , W W q f 5 k jf f . M f W’ I ff Nw.., Woodside holds off on $750 m for Israel , 5 J , www.w.. ; G, Woodside reviewing Israel plan – report , J , www.. .; .; N E, A f, 6 D , www..;U www..; U O, Woodside takes Leviathan stake, D , www.. ; F T, Woodside snaps up Leviathan stake , D , www.f.. www.f. .
f , w f . U f , C w w $6 $. f f f , f 65/5 f Bk . A x W’ L, f f f C x f A f w N, A . I , f, - k f f C.
Natural Gas in Cyprus
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6
Eport Options
Monetization
M
z f f k f . Mz — k — f f j’ f. T f z f f f . D k f - f f k. T f ff (w w ), (.. f k), , f, k k, f f x. C’ x f qf w k A, E, ; f G Tk, E k. T M x w. w. T z f S H. 6 Pipeline to Turkey Cost Element
Tk ff f x f - - 7 Tk. Hw, 6
S H, “N G Ex O f I C,” M P P, G M F f U S, S , ://www.f./ /--x--f /--x--f---/ ---/.. 7
S f x Ak, Akdeniz’ Akdeniz’deki deki gaz düğümün düğümünün ün çözüü Türkiye’ Türkiye’den den geçiyor , J , www.k.. ; K C, Άγκυρα: Η λύση για την εξαγωγή του κυπριακού αερίου είναι η Τουρκία, J , www. k.. ; K C, Άγκυρα: Συνεργασία στην ΑΟΖ μετά την λύση του Κυπριακού, Κυπριακού, D , www.k.. .
16
f f w R f C Tk. T fw f f , . . A Tk w w z ( G qf), f x f C Tk. I w ff C w k w . D w w k Tk w fw q f x , ’ f w . Tk q f, f, f x, - - f w ( w ) w x . Hw, Hw, f w A Tk, - , f f Tk f f . 8 Market Risks
P f C (/ I) w k f Tk k. T k w z w. 8
Sf w j-f w w kw f , q . I, D L x $.75 . S D L, East Africa gas – potential potential for export , Oxf I f E S, M , www.xf.. www.xf. .
The German Marshall Fund of the United States
Map 1 – Examples of available monetization options in the Eastern Mediterranean
Source: Oxford Institute of Energy Studies
F, Tk Gz’ x , f G, E k f fw k E w k. Hw, R f k ( w) f k Tk ff . T f f C Tk k. S, w w f f Tk w C . T f C f LNG A k. U
k f (.. , , .), . I f, z f E M ( C) Tk f . T, w C Tk w k f f , f . A w q f f f f. T C (/ I ) w w
Natural Gas in Cyprus
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f Tk 4. O , f C I f ww f w k w f. 9 T, f - w Tk ff k f k , w w f - k w . T w k ( ) ) k, w f f x f C . 4 O j w f Tk k S Dz f Azj. T BP- f (4 f) S Dz f w f f (.. S Dz P II) f . U , w x 6 Tk k, w G, I, E k TA P (TAP). 4 T k , f w : ) S Dz f , ,
j ; ) S Dz fx w x k ( ) w f w f . F Az (.. S Dz II) k -, f A, ACG , U, f. 4 B w Az , Tk k ( w f f ) Iq, I, Tk. I, w k f x Tk k w ff. A A f ff Bk S E , w Tk f fw w f ff (Bk S, Tk) (T, A, S Lk, S ) . 4 F, C E M f w . If C I x Tk 5 (7 ) k f x f A f, Tk k f . Tk
9
P w - f w k, f f k. 4
Tk f f R, Azj, I, A (LNG), N (LNG), w LNG f k. F f Tk k, f x E Mk R A A (EPDK), Natural gas market: 2011 sector report , , www. ..k ( ..k (www.k..k ). www.k..k ). 4
U O, EU hails TAP boost to European energy security , 8 J , www.. ; BP, About BP Caspian: Shah Deniz , A , www... www...
18
4
S S P, Central Asian and Caspian gas production and the constraints on export, Oxf I f E S, D , www.xf.. www.xf. . 4
T U.S. E If A Tk 4 f f . T f , w w w f . M E If A, Technically recoverable shale oil and shale gas resources: an assessment of 137 shale formations in 41 countries outside the United States, J , www.. .
The German Marshall Fund of the United States
w, w w ww . 44 I f , , w f f C ( I) Tk w x q. Other Pipeline Options Pipeline to Greece
Mz f C I ff - G f k: (.. ), ff , f x w f, k k f . 45 A - G w ff f w , Tk . T z ) , f - ff f E M M w G ( , k); ) G w f ff k, Gk k Tk k. Onward Transit to Other European Markets
C w f x Tk / Gk k. 44 I , PSC C’ C’ ff “ ff C, f .” T f C, w ff f f C. I w k Tk. Tk. 45
T z G’ G’ (-w) w DEPA DEPA SA. F f w ’ CEO j fw, f x H S, The role of the ITGI System: New opportunities and synergies rise from the East Mediterranean , P C E S, 6 J , www... www...
B w f C Tk E k w x f C w f f Tk . A f f w $ $5 , f f k , Tk , .. Tk Gk B , f x f C w $ $ . T x $.5 f k C E. I w w f k S E. S x q Tk . If Tk f z, w . T Tk fwk w w C . Lk f w k f f. T x f C I w q ff TAP , w S C E q f . Hw, TAP - x f f , w w f S Dz II , w f fw f . 46 F, F, j S E C E w w ff . 47 46 R, TAP gas pipeline project gets vital legal approval , 7 M , www.. . 47
F f S E f f A G S P, Security of gas supply in Southeastern Europe: potential contribution of planned pipelines, LNG, and storage , Oxf I f E S, J , www.xf.. www.xf. .
Natural Gas in Cyprus
19
M, k f k w f f . F x, f S E w k ’ . S, w f k f -x k f f f . 48 P x G, I, S E, C E w w x f R w w Az f S Dz P II f. I , x f E M w x f w E Iq, I, Tk w ff Bk S S E.
f ff x f E S. 49 T x f x k E M M ff f q f f w w. Hw, k w f : • T f k, w j f x ; • T f f f w w ; • T f w ff w ’ f f 5 x; • T k f f E, 5 ff , x f Iq I.
Pipeline to Neighbors in the Eastern Mediterranean
P x J, L, S, E C. I f , f f f f w . T f f f C I,
49
S Hk D, L E-K, B F, East Mediterranean gas: what kind of a game-changer , Oxf I f E S, D , www.xf. ; ; B Sff, Sff, Energy resources and markets in the eastern Mediterranean Mediterranean region, E M E Pj: P Bf, G M F f U S, J , www.f. ; S H, Energy discoveries in the eastern Mediterranean; source for cooperation or fuel for tension, M E Pj: P Bf, G M F f U S, J , www.f. . 5
F f w z , B F J S (.), Natural gas markets markets in the Middle Middle East and North Africa, Oxf I f E S, , www.xf.. www.xf. . 5
48
T f ( f ) f , q f w w k .
20
M f w f E’ ff w f x f f A A, Between a rock and a hard place: Egypt’s Egypt’s new natural natural gas supply supply policy policy , A P I C, V V 8, N , M , www. .. . .
The German Marshall Fund of the United States
Liquefaction and Hybrid Options Liquefaction
Lqf z z f C , w f f LNG f f 5 . A k, f (MU) J f f qf Vk w Bk , .. N E Dk D A O Ex. 5 A KRETYK, Vk q f - , , w C qf f w . T w w C f LNG, f ’ k . 5 Lqf ff z ( Tk, G, ).
• LNG w- w k . F x, w E w LNG f. T f C w w w LNG , , ff LNG k . O f LNG - LNG f . 54 • LNG’ fx k f . T k A L A, w -, -x . T w E k w f -x.55 P fx ,
• LNG k f , f LNG w f f w. T w f LNG x f LNG w. 5
MU w / FID f LNG j. T w f 6 f f f f , w w . S, MU f k fw , f C’ C’ qf j f , ’ LNG f f EU . M f MU C G Nw, Memorandum Memorandum of of understanding understanding signed signed , 6 J , www.w.;; U O, Cyprus inks MoU www.w. on LNG , 6 J , www.. . 5
E P, 8 τρις κ.π. βλέπει στο οικόπεδο ο πρόεδρος της ΚΡΕΤΥΚ, 4 J , www...
54
S f x P f Vw Pö M C LNG’ w k : How can small-scale LNG help grow the Euro pean gas market? market? , J , www... www.. . 55
F f f E f Pk H, Continental European gas hubs: are they fit for purpose, Oxf I f E S, J , www. xf.; xf. ; J S Hw R, The transition to hub-based gas pricing in continental Europe , Oxf I f E S, M , www.xf.; .; J S, Continental European long-term gas contracts: contracts: is a transition transition away away from oil oil product product linked-pricing linked-pricing inevitable and imminent , Oxf I f E S, S 9, www.xf. .
Natural Gas in Cyprus
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f f w A A A-Pf B. 56 T , w LNG k, f x f A A - , US , E Af ff . T k k k L A, A w , f , . 57 N N f f LNG ff k ff f j’ f, f C j A ( f f fx).58 Combination of Monetization Options
T f — f — qf fw x f G’ P G 56
N, fx x f x qf . I f Gf , f - w , f j. T j’ k f f ( -) . Hw, q f - LNG w ( f ) f wf x x qf , ff f fx . O w, x / ( ) j j , f w f . F k A LNG j , Hw R, LNG trade-flows in the Atlantic basin: trends and discontinuities , Oxf I f E S, M , www.xf. .
C DEPA SA, w z f C ( I) z . Hw, f , f ff C, q f . T f x w f f j . LNG j f f x, ff. F x, 65-7 f f f . T j f f f f f . S ’ — - x w 65 f . F, F, x j x qf f -à- k k . T LNG fx . H, z C f — .. f w x f qf f Vk Vk — j
57
S f x P’, Japan seeking seeking U.S. U.S. LNG, to ask ask for U.S. U.S. waiver during Kuwait meeting , M , www... www.. .
58
C qf w f f EU, f.
22
The German Marshall Fund of the United States
f f .59 Choosing the Right Option
T f z f ff f f . I q . T f f f(), w k f f . D w f , , majeure , fx, , force majeure f (f ). O f wk x k, w C
.6 A C , w. B f, f LNG f ff k f w E Af, N A, w k. A f C LNG k E M , I L. L. If C f qf, w f , f f .
59
T f f Sk z f qf f x (Gz, T, T, S) f w f f f . F f x U O, Shtokman revamp could center on LNG, A , www.. ; U O, Statoil backs LNG bid’ on Shtokman , A , www. .. ..
6
F f z , A G, The offshore discovery in the Republic of Cyprus: monetization prospects and challenges , Oxf I f E S, J , www.xf. .
Natural Gas in Cyprus
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7
Commercial Coopera Co operation tion ith Israel
Unitization Agreements
C
w I f f f z z z. T f , w ff , . T f z f f . C- z z , N S f w. 6 I E M, z q w C I f A f w, w, x Bk I’ EEZ. D w w w . Uz Uz w L E w f f k w ENI-KOGAS T x EEZ. Uz q fwk, ff f, , ff. C I k . I , f , f f x, . T C
w , f f f . 6 Joint Monetization Definitions and Relevance for Cyprus
T f f w f - k f A (/ , f ). Hw Hw,, z f k, f f z z f w x f, w w k f f qf . A k, j z z f C w w f f ff (.. ) f. C f f C f qk w w w f f ENI-KOGAS / T w ff k. M, j z z f C w j ( f), f A w. T / , f f.
6
6
If f A L W, The North Sea experience – an analysis of cross-border unitization and move towards establishing an international legal framework, U f D, C f E, P M Lw P, www...k ; www...k ; Az Ikkw Aw, Unitization of contract areas: is it an obligation defeating the stability of international petroleum agreements , U f D, C f E, P M Lw P,www. P, www. ..k .
24
If f F M, M, Cyprus, Israel offshore gas fields to get get navy protection protection, M , www.f. ; ’ w ff, A J ; I C G, Aphrodite’ Aphrodite’s gift: can Cypriot Cypriot gas power a new dialogue, E R N 6, A , www..; .; E P, «Πράσινο φως» στην Κύπρο για τη συνεκμετάλλευση του αερίου με την Αίγυπτο, Αίγυπτο, J , www..; www..; S K, The status of hydrocarbon exploration in Cyprus , P I B Cf, T A, I, D , www... .
The German Marshall Fund of the United States
Potential Partners
I , q f (x-) j z E M w R f C I. C f I’ ff f f - j qf Vk C. T , I ff J I k 4 f ff f x. 6 Hw, I f z f x. T 4 x f w f x f I. F x, J , A’ W w f ’ k L, w w LNG 64 C. J z w I C w f f x j f. E x f (w LNG ), w f z f f . T z : ) f w E k; ) f z 6
R, Israeli government approves 40 pct limit on natural gas exports, J , www.. . 64
Nw.., Woodside holds off on $750 m for Israel , 5 J , www.w.. ; C M, Noble suggests quicker way of bringing in gas , J , www.-.; www.-.; G, Woodside reviewing Israel plan – report , J , www... ; N E, A f, 6 D , www..; www..;U U O, Woodside takes Leviathan stake , D , www.. ; ; F T, Woodside snaps up Leviathan stake, D , www.f.. www.f. .
k ff ; ) ff k k w f ; ) q LNG x . 65 T ff . A E ff f qf , f k j z z w C . S, C L . L f C I x w f , . L’ ff fwk, k f , ff , k - . 66 Other Legal and Political Risks
I , j z C f w f f w. T x x f k, w k f x, w f , , . T w A T-L f S LNG j f ff. T f qk. 65
Hw, Hw, E w k w w fwk ’ , , w w -f . S f x A A’ , Between a rock and a hard place: Egypt’s new natural gas supply policy , A P I C, V V 8, N , M , www.. . . 66
S Hk D, L E-K, B F, East Mediterranean gas: what kind of a game-changer , Oxf I f E S, D , www.xf. . .
Natural Gas in Cyprus
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J z w C I - f M E. T f f x f . A LNG C w I k . T ff , f . C w I IOC f . T f , , f j’
26
/ . F I, j z w C w f f w Tk.67
67 M M L, Cyprus bailout and Israel-Turkey Israel-Turkey détente present present new opportunities, 5 M , www.f.; www.f.; Nw Yk Yk T, For Cyprus Cyprus a sudden need to play to play nice with Turkey Turkey , 8 M , www... www...
The German Marshall Fund of the United States
8
Conclusions
T
f A A f f ff C . . I w f , f f x k f . I ff , f ’ . T f C ( ) f , w xz f. B , C f f k f Tk. Tk f C w EEZ. I k k C’ ff f f f . T C j , w f f x C’ ff k. S f EU k, w -k - - . T fw w w, w w w j ff . P x f C k f . A f f f z q f , x f , ff j f A f. P-
f f k f f C. If A f f, f, C w k w f . P f f f Bk , w T ENIKOGAS f k w , / j z w I qf LNG C. S w . T x ENI-KOGAS T T ff f z z f . E E f x f f. C fq , f- x Tk w z , f . . T w f k k q f . T f “ x ” — LNG — w f. T w LNG f f f. T k f -, . A f x C (.. f 5-8 f A), f LNG w . Lqf x f LNG j j , k f k ( LNG
Natural Gas in Cyprus
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), k k ( LNG’ fx f k f), f), xz f f f f LNG f . LNG’ w , , k , , k-f. T f f C’
28
w f f w. I EU’ f f . I, ff , j w , , , C’ w ff f ff f, , , E w.
The German Marshall Fund of the United States
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