Cyprus will sign an initial deal with Italian oil and gas firm Eni in the next few days for the development of a liquefaction plant.
“We discussed the issue of the memorandum of understanding for the liquefaction terminal in Cyprus. The memorandum is ready, it has been agreed on, and there are some formalities left, such as its approval by the council of ministers, so that we can proceed to its signing in the next few days,” Cyprus minister of energy, commerce, industry and tourism Yiorgos Lakkotrypis said.
He added that the timeline for construction will depend on more gas being discovered offshore Cyprus.
“The initial planning for the exploratory drillings was for the third and fourth quarters of 2014. Eni is making a great effort to speed up and to begin the exploratory drillings toward the end of August 2014, something that is very important because it will expedite the procedures for the discovery of more natural gas,” Lakkotrypis said.
Cyprus has been planning the Vasilikos LNG export terminal since US independent Noble discovered the Aphrodite field in 2011, but the project was thrown into doubt when the results of appraisal drilling in block 12 revealed significantly smaller reserves than initially hoped. Mean reserves were estimated at 5 trillion ft³ (141bn m³) rather than 7 trillion ft³, which threatens the economic viability of LNG exports.
In November last year, Cyprus signed an initial agreement with exploration partner Total for the development and construction of Cyprus' proposed LNG export project. Total has exploration rights in offshore blocks 10 and 11 of the Cyprus maritime exclusive economic zone.
As well as Total, Cyprus signed an initial agreement for the LNG terminal with block 12 partners in June. Block 12, which includes the Aphrodite offshore gas field, is operated by Noble (70pc) in partnership with Israeli firms Delek Drilling (15pc) and Avner Oil (15pc).