* Cyprus can supply over 50 bcm gas to Europe by 2030
* Island's current find worth $80 bln, 7 tcf reserves
* Estimated 60 tcf gas in Cyprus waters as drilling expands
By Michele Kambas
NICOSIA, Jan 31 Cyprus is pressing ahead with
plans to construct a terminal to liquefy natural gas off its
southern coast and could be in a position to export LNG to
Europe by 2019, the head of its national hydrocarbons company
The island reported its first natural gas discovery in late
2011, with an estimated 7 trillion cubic feet (tcf) of reserves,
in an exploration block now under license to U.S. based Noble
Cyprus recently awarded production sharing contracts to a
consortium of Italy's Eni and South Korea's Kogas
for two blocks, while is in advanced talks with
France's Total for an additional two blocks.
"Based on studies done some time ago, there are probably
over 60 tcf (of gas) in Cyprus waters, and the whole of the
Levantine Basin is estimated to contain 120 tcf," Charles
Ellinas, executive president of the Cyprus National Hydrocarbons
Company (CNHC) said in an interview.
Based on anticipated growth in European demand for gas of
100 billion to 150 billion cubic metres (bcm) by 2030, Cyprus
should be able to provide over 50 bcm by then, or around half of
the additional needs, Ellinas said.
The export volume could possibly be more if gas from finds
in Israel and Lebanon also come through the Cyprus LNG plant, he
"That would go a long way towards fulfilling Europe's
requirements for additional gas."
As Cyprus seeks an international financial bailout as part
of Europe's debt crisis, natural gas is its
The value of the 7 tcf reported by Noble alone amounts to
$80 billion at present prices, and the potential profit overall
ultimately could dwarf Cyprus's 17.5 billion euro economy.
"With Eni/Kogas and Total following close behind, this is
only the beginning," Ellinas said, referring to expectations of
finds in those fields.
Negotiations with lenders over a bailout have touched upon
the potential of the gas discovery, but Cyprus has been adamant
that there can be no interference from outsiders in how it
manages its reserves.
"For Cyprus, there is nothing else," said Ellinas. "It is
our only hope."
Ellinas, who took up his post at the newly created CNHC in
January after holding senior positions at energy project
managers Mott MacDonald, said one of his priorities would be to
start planning for the construction of a liquefied natural gas
"We are in advanced discussions with Noble on jointly
developing the LNG terminal," Ellinas said.
Based on the present timeframe, construction should start by
early 2016. It will take an estimated four years to complete the
LNG export terminal and three years, meanwhile, to build
offshore installations and subsea pipelines.
Ellinas said the terminal, which will be located in the
Vasilikos area on the island's southern coast, could cost around
$6 billion and have a production capacity of 5 million to 6
million tonnes of LNG per year.
"We should be in a position to deliver gas (domestically) by
the end of 2018 and start selling LNG (abroad) in 2019," he
Cyprus has held talks with neighbouring Israel, which has
also reported major gas finds in the past decade, on channelling
Levantine gas to the Cypriot terminal.
The basin could probably not sustain more than one LNG hub,
"I believe we have a highly commercial project. Europe is
down the road; there is a need for gas; the partners we have are
strong; and all that bodes well."
(editing by Jane Baird)