Cyprus may emerge as major gas hub after new discovery

DUBAI: Cyprus could turn into an important gas hub and might consider constructing a land-based natural gas liquefaction plan after the impressive string of major discoveries in the area. ExxonMobil and partner Qatar Petroleum announced the major gas discovery offshore Cyprus this week.

According to Rystad Energy’s senior upstream analyst Palzor Shenga, the  Glaucus-1 and the neighboring discoveries Aphrodite and Calypso will collectively add around 2 billion cubic feet per day of gas at peak.

But Bringing gas from these discoveries to the market will not be straightforward, Shenga said.

“Cyprus currently lacks a natural gas liquefaction facility. Egypt and Cyprus have recently agreed to build a subsea pipeline to link the significant gas resources located in Cypriot waters with Egypt’s LNG export facilities. The landmark deal is expected to carry a price tag of around $1 billion. This pipeline will be initially used to transport gas from Aphrodite, followed by Calypso. The liquefied gas will be then re-exported to the EU in the form of LNG. However, the project is not as easy as it sounds due to the geopolitical concerns from the neighboring countries.”

He added: “These discoveries are huge and can add fuel to the ongoing dispute between the governments of Cyprus and Turkey. Under these circumstances, Cyprus must make sure that the energy giants can run their operations safely, without threats of military intervention, and that they can invest in developing and bringing them into production.”

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