Our strategy? To bring gas to Europe

Our strategy? To bring gas to Europe

Simona Manna
The goal is to create a corridor for exporting blue gold to the European Union. The trilateral alliance with Israel and Greece - not only in terms of energy but also politics - will be crucial in this sense

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After coming out with flying colors from a tough economic crisis that broke out 3 years ago, Cyprus speeds on towards its goal: to play a leading role in the energy cooperation between the countries of the region, most notably between Israel, Egypt and Greece. But the island country’s ambition is also political and diplomatic, as President of the Republic of Cyprus Nicos Anastasiades explains in this exclusive interview with Oil.

Approximately 2 years ago, the production test began at the Aphrodite gas field in block 12. An event then defined by the Energy Minister, Giorgos Lakkotrypis, as "very symbolic." Since then, what has been happening in the Levante Basin?

Since the production test in the Aphrodite gas field, the exploration activity in Cyprus’ Exclusive Economic Zone (EEZ) continued in all 5 licensed Blocks. In June 2016, the B12 Contactor submitted a preliminary Field Development and Production Plan, an event of paramount importance towards the exploitation of the Aphrodite gas field. Moreover, Eni’s announcement last August of the world class “Zohr” gas discovery in offshore Egypt was also a very important milestone since it confirms the significant gas potential of the Eastern Mediterranean region. The aforementioned discovery, which is only 6 Km away from Cyprus’ EEZ, has proven that apart from the conventional reservoirs that originated mostly by the Nile Delta Basin and from which all previous gas discoveries were associated with, there is now a new carbonate reservoirs concept, which changes the exploration focus in the Eastern Mediterranean region and is fully associated with the Eratosthenes Continental Block within our EEZ. This development has attracted the interest of multiple oil majors, not only for exploration purposes but for investments as well. Consequently, the Council of Ministers of the Republic of Cyprus has decided to launch a third licensing round for oil and gas exploration in the Cyprus EEZ.

Nicos Anastasiades

Nicos Anastasiades

Elected President of the Republic of Cyprus on 24 February 2013. Nicos Anastasiades was Member of the House of Representatives from 1981 until his election to the Presidency of the Republic. During his lengthy term he has served the Parliament as Chairman of the Committee on Foreign Affairs, Chairman of the Committee on Educational Affairs, Chairman of the Inter-Parliamentary Committee on Foreign Affairs until 2006 as well as Vice-Chairman and member of many other Committees.

The Eastern Mediterranean has an amazing energy potential. What value can it have for Cyprus, in terms of exports and energy independence?

The Government of Cyprus continues to advance its strategy for the creation of an export gas corridor from Eastern Mediterranean to Europe. Ensuring security of energy supply through the exploitation of our indigenous resources is, in fact, one of our main goals. The “Aphrodite” discovery has brought us a step closer towards achieving this objective. Our energy plans include using Cyprus’ natural gas reserves, initially, for electricity generation and, subsequently, to attract energy-intensive industries. Moreover, we aspire that possible future hydrocarbon discoveries in our EEZ will enhance further the great potential of the Eastern Mediterranean to become a gas supplier to both Europe and Asia.
Earlier this year, Vice President and European Commissioner for energy Maros Sefcovic visited Cyprus. What is the European Union’s position towards Cyprus’ energy policy?
Europe's main goal regarding Cyprus is to end its energy isolation, interconnecting the island with the energy infrastructure of mainland Europe and LNG storage facilities in Europe. This is also reflected in the support we receive from the EU regarding Projects of Common Interest. It is also one of the main policy pillars of my Government, and during his visit to Cyprus Commissioner Sefcovic was very supportive of our efforts. As Mr. Sefcovic pointed out, these objectives will improve Cyprus’ security of energy supply, will increase its competitiveness as consumers will have access to multiple sources and will allow the sustainable development of its resources, including renewables. At the same time, he reaffirmed that the European Commission envisions for the Cypriot and Eastern Mediterranean gas to enhance the EU’s security of energy supply, by introducing alternative sources and routes for natural gas.

Do the results of the trilateral conference held on January 28, 2016 in Nicosia, attended by the Prime Ministers of Israel and Greece, also have a political importance for Cyprus or is the cooperation limited to the field of energy?

Cyprus, an EU member state with a stable legal and political environment, has traditionally implemented a policy based on regional cooperation and the establishment of good and long lasting relationships with all of our neighbors. The trilateral mechanisms established between Cyprus, Greece and countries in the region form part of this policy. During the Cyprus - Israel - Greece trilateral summit held recently, all countries agreed to strengthen their cooperation in order to promote a trilateral partnership in different fields of common interest and to work together towards promoting peace, stability, security and prosperity in the Mediterranean and the broader region. It was also agreed that all parties would further examine practical means for cooperation, as well as for the implementation of joint projects and the exploitation of synergies in the fields of energy, tourism, research and technology, environment, water management, combating terrorism, and migration. Therefore, it is evident that Cyprus - and all countries involved in the trilateral mechanisms - has a lot to gain through this cooperation, not only in the energy sector but at political level as well. Concomitantly, the recent trilateral summit held in Nicosia is highly important from a political point of view. One of the core aims of the foreign policy of Cyprus is the upgrading of Cyprus’s regional role, as a friendly country with a positive agenda for the region, the nurturing of constructive, good relations with all our neighboring countries and the promotion of regional stability through close cooperation and mutual understanding. I consider the trilateral Summit to be an important step in this direction, and it is for this reason that the political dimension of the trilateral mechanisms is as important as the energy dimension. In fact, the energy plans cannot be implemented without the necessary political framework and support.

The Eastern Mediterranean could be a new energy hub, strategic even for Europe as an alternative to Russian gas. Among many export routes for Levantine gas, which option seems more viable?

As far as the “Aphrodite” discovery is concerned, prior to the selection of the optimum monetization option for the field’s resources, detailed analysis of all alternative options was performed. The Block 12 Contractor, in collaboration with the Ministry of Energy, concluded that the most economically viable option for the monetization of the “Aphrodite” resources, based on existing financial and commercial conditions, is through regional subsea gas pipelines to Cyprus and Egypt. In the case of future discoveries we will again examine all available options.
The renewed interest in energy reserves in the region relies on the important discoveries of new gas fields in Egypt. Is Egypt also participating in this cooperation between Cyprus, Greece and Israel? What role is this country expected to carry out?
We consider the promotion of cooperation in the field of energy, between Cyprus and our neighboring countries with mutual interests in the area, as one of the top priorities of the Cypriot Government. To this end we put a great effort in maintaining good relations with all of our neighbors; Lebanon, Israel, Egypt, Jordan and Greece. Therefore, we aim at extending the high-level meetings between Cyprus-Greece-Israel and between Cyprus-Greece-Egypt to include more countries in the region.

Does the process of reconciliation between Israel and Turkey worry you? Is it possible that this rekindling of relations between Tel Aviv and Ankara will somehow be resolved to the detriment of the cooperation with Cyprus and Greece?

No, the possibility of reconciliation between Israel and Turkey does not worry us at all. We have been informed of the dialogue between Israel and Turkey from the start and we are not opposed to this process in any way. Firstly, it should be stressed that relations between Cyprus and Israel have reached a level that now has its own dynamic, such that other developments will unlikely have a negative effect on them. As for the trilateral cooperation, Israel has already agreed to host the next summit by the second half of 2016. The value of the trilateral cooperation also remains, regardless of the development of relations between Israel and Turkey. What we propose is to fill a political vacuum in the eastern Mediterranean, where a multilateral forum for debating issues of common interest, such as terrorism, immigration, energy and other, between all countries, is lacking. Finally, we do not consider our relations with Israel as zero-sum game. We maintain excellent relations with Israel but, at the same time, we also have excellent relations with the Arab world. In conclusion, we do not believe that the revival of relations between Israel and Turkey may have negative effects on our bilateral or trilateral relations.

Beyond gas discoveries, what are your long-term energy projects, also in terms of renewables?

The Government of Cyprus has prepared a Master Plan for Vasilikos, a heavy industrial area which will host the Energy Centre. The overall objective of this Master Plan is to offer a complete picture of the area and to examine whether the existing facilities and the proposed future projects and general development of the area, for the next 30 years, will be compatible with current facilities, based on risk, safety, security, environmental and social considerations. The LNG Plant, the liquefied and LPG storage facilities, as well as Gas based industries and other energy infrastructures that may be needed in the future, could be accommodated in this area.
In addition, the Government of Cyprus is currently promoting 3 projects that were selected by the European Commission as Projects of Common Interest (PCI’s). The first project is the so-called “Euro-Asia Interconnector”, an electricity interconnection between Israel, Cyprus and Greece, supported by all 3 Governments. The second is the gas pipeline project called “EastMed Pipeline”, which will connect Cyprus to Europe via Greece. The third project aims at “Removing internal bottlenecks in Cyprus to end isolation and to allow for the transmission of gas from East Med”. In effect, these projects aspire not only to lift Cyprus’ isolation, but they will also constitute the means through which the Eastern Mediterranean will be linked to the EU. Regarding renewables, Cyprus has cooperated with the International Renewable Energy Agency (IRENA) to develop a roadmap for the deployment of renewable energy sources (RES) in order to achieve, by 2020, 13% RES share in the gross final energy consumption of the country and 16% RES share in the electricity production. The resulting Renewable Energy Roadmap provides a detailed analysis of deployment options and delivers quantitative insights to assist Cyprus with upcoming energy policy decisions. The roadmap indicates that deployment of renewables could greatly reduce energy import dependence, while also lowering the cost of electricity generation in Cyprus.

See the OMC 2015 Special