Minister: 2 major gas companies keen on Israel-Cyprus plan for pipeline, gas processing facility

Two big international oil and gas corporations have expressed interest in Israeli-Cypriot proposals to build a pipeline to transport offshore natural gas from both nations to Cyprus for liquefaction and shipment by ship, a Cypriot official said Tuesday.

In an interview with The Associated Press, Energy Minister Giorgos Papanastasiou said the idea will be presented on May 29 to hydrocarbon exploration companies off Cyprus’ southern coast and pipeline and gas processing facility manufacturers.

Papanastasiou will pitch the concept to each energy company separately to seek their support.

Papanastasiou said energy corporations like the proposal because of its low cost compared to alternative exporting ways, such as a 6-billion-euro ($6.5 billion), 1,900-kilometer (1,180-mile) pipeline connecting east Mediterranean gas resources straight to Europe.

Companies would recover their initial investment and profit faster due to the reduced cost.

The 320-kilometer (200-mile) pipeline costs 450 million euros ($489 million) and the liquefaction facility 1 billion euros ($1.1 billion).

Papanastasiou suggested a ship-based liquefaction plant. However, modern modular technology used to build onshore facilities may add or remove modules to satisfy gas supply needs.

Cyprus would assemble onshore plant modules developed abroad.

Papanastasiou will lead a delegation to Cyprus in the middle of next month to finalize a project contract with Israel.

The pipeline and processing facility will be tendered after the Israel-Cyprus agreement is concluded and energy companies sign up.

Papanastasiou said some of the gas transported to Cyprus would be used for domestic power generation to lower energy costs.

Ship-borne natural gas liquefaction expands market alternatives. Papanastasiou believes Asia may be a secondary market to Europe.