Christodoulides calls for ‘development’ of Cyprus’ natural gas ‘as soon as possible’

President Nikos Christodoulides called for the “development” of the natural gas located under the seabed off the coast of Cyprus “as soon as possible” when he met American multinational oil corporation ExxonMobil’s vice president for global exploration John Ardill on the sidelines of the United Nations general assembly in New York. According to government spokesman Konstantinos Letymbiotis, the pair discussed “the next step” for the ‘Pegasus’ field and the ‘Glaucus’ field, for which ExxonMobil jointly holds development rights, alongside QatarEnergy. Christodoulides was said to have “expressed his satisfaction with ExxonMobil’s successful presence in Cyprus’ exclusive economic zone” and “noted that the declaration of the two fields as commercially viable constitutes a significant milestone, creating the conditions for the transition to the next phase”. On this front, he called for the “established momentum” to be “maintained”, and for the “acceleration of the evaluation of available development options, with the aim of submitting a development and production plan as soon as possible”. In turn, he said, this would make it possible for ExxonMobil and QatarEnergy to “advance the necessary procedures towards a final investment decision”. Letymbiotis said that Christodoulides had also “highlighted that the utilisation of domestic natural gas reserves is a key priority of the Republic of Cyprus’ energy strategy”. He also said that the development of domestic natural gas “could further strengthen Cyprus’ role in the eastern Mediterranean and contribute to Europe’s efforts to enhance energy security and diversify supply sources and routes”. Additionally, he stressed “the Republic of Cyprus’ commitment to close cooperation with ExxonMobil”, which he described as a “significant long-term partner”, saying that this cooperation can “translate the successes of exploration activities into concrete development and production projects”. ‘Pegasus’ and ‘Glaucus’ fields were declared marketable in June ExxonMobil and QatarEnergy had declared the ‘Pegasus’ field and the ‘Glaucus’ field “marketable” at the end of June, with both fields being located in Block 10 of Cyprus’ EEZ. Ardill had said at the time that the declaration constituted “the culmination of eight years of work”, following on from “the award of the blocks in 2017, the discovery in 2019, the second discovery last year”. He added that the declaration “puts us on a path, with some additional drilling at the end of this year, to gather the latest information”. “Then, we will move into what is called the initial engineering and design phase, where we will design the facility, and the next step is the final investment decision, which we anticipate will be made in 2029,” he said. Following on from this, he said, the matter now finds itself in “a critical stage for carrying out the subsoil modelling, the engineering work, and then making the investment decision and constructing the facility”. He said that with all this in the metaphorical pipeline, he expects for production of natural gas from the field to be underway in 2033. “We are committed to 2033, but we hope to move faster,” he said. Asked whether ExxonMobil is considering constructing an onshore liquefaction facility in Cyprus or utilising existing infrastructure in Egypt, he said that the corporation is “currently looking at all the different ways” in which the deposit could be extracted. ExxonMobil ‘considering different proposals’ for liquefaction “We are also considering different proposals which include a facility in Cyprus with a connecting pipeline to Egypt. There are also existing liquefied natural gas facilities … which we can utilise. An alternative proposal is floating LNG, where all the processes are carried out on a floating vessel,” he said. However, he added, the idea of a floating vessel is “usually more demanding in terms of cost”. On this front, he said that “if you have very large resources, you can build onshore LNG plants, as they currently have in Qatar, but that requires larger resources than we have identified here to date”. “So, the prevailing idea is probably a pipeline connection to Egypt, given the infrastructure and everything you have seen between the Cypriot and Egyptian governments, which gives us great confidence that there is a good level of coordination between the two governments,” he said. In this, he was referring to existing agreements signed by the Cypriot and Egyptian governments, as well as the consortium comprising French multinational corporation Total and Italian energy company Eni, over Block 6 of Cyprus’ EEZ, which is located immediately to the north of Block 10. That agreement will eventually see Eni use its own infrastructure to take the Cypriot natural gas to the Segas LNG terminal in the Egyptian port city of Damietta, and export the gas to Europe and, if required, elsewhere from there.