There’s been no shortage of news this week about energy developments in the eastern Mediterranean. But while Israel still mulls over its decision of where to pipe or ship its new bounty of natural gas, the nearby island of Cyprus is moving forward with a plan to build a liquified natural gas (LNG) export terminal. The facility would liquify Cyprus’s own reserves of offshore natural gas—believed to range somewhere between 3.6 and 6 trillion cubic feet—to be exported via ship. It’s a big, albeit tentative, step for the tiny island nation, but it may factor in to Israel’s decision. The NYT reports:
[Cyprus’s gas reserves] may not be enough to supply an L.N.G. facility by [themselves], analysts say. The industry rule of thumb is that a single-unit L.N.G. facility, which chills the gas to a liquid, requires about six trillion cubic feet of gas to make the plant economically viable. […]It is possible that more gas will be found. Both Total and the Italian energy company Eni are exploring. Cyprus is in an area called the Levantine basin, where exploration began only in the last couple of decades and which the industry thinks contains large amounts of gas. […]But finding more gas would take time. There have been hopes that Israeli gas from Leviathan might go to a Cypriot plant, if built. But talks on the subject have yet to produce an agreement, and Israel has many options — including building its own L.N.G. facilities and sending gas by pipeline to its neighbors.
The FT ran a great visualization of Israel’s options for shipping its gas earlier this week. That rundown, written prior to Thursday’s agreement, speculated that a Cypriot LNG plant was unlikely because “Cyprus does not have enough gas to justify the huge investment needed.” But if Total goes ahead with its plan to build this plant, Israel will have an attractive option for getting its own, much larger reserves of offshore gas to market.This region’s new resource bounty is shaking up the energy world and geopolitics alike. We’ll be watching.[LNG carrier image courtesy of Lightgraphs]