New $400-MM Israel-Cyprus gas pipeline awaiting government approvals
- Gas producer Energean signs letter of intent
- CEO says gas could flow within 12 mos
- Pipeline capacity of 1 Bm3y
A $400-MM pipeline to transport natural gas from Israel to Cyprus is awaiting government approval from both countries and Israel has expressed support, the head of Eastern Mediterranean focused gas producer Energean said on Tuesday.
Energean on Monday signed a letter of intent with leading Cypriot industrial and energy group Cyfield for the potential supply of natural gas from Israel to Cyfield's planned power plant via the new pipeline, said Mathios Rigas, CEO of the British firm.
Gas could flow through the pipeline within 12 mos of the government approvals being granted, said Rigas, speaking in an interview on the sidelines of the ADIPEC energy conference in Abu Dhabi. Energean is awaiting a response from the Cypriot government, he added.
1 Bm3y capacity. "The pipeline would have the capacity of 1 billion cubic meters a year (Bm3y), enough to bring all the gas the Cyfield project needs, but also to give more to the island if others need to use the gas," Rigas said.
The project, which would cost $400 MM, could be fully funded by Energean, but partners may also be brought in the future, Rigas said. Energean is also waiting government approvals for another gas supply deal, from Israel to Egypt via the planned Nitzana pipeline, which Israel has not yet approved.
The pipeline would ease an energy crisis in Egypt, which has spent billions of dollars on importing liquefied natural gas (LNG) and is part of a concerted effort to boost Israeli gas exports to the Arab world's most populous nation.
The company in October signed a 15-yr transmission agreement as part of $4-B worth of Israeli gas offtake contracts.
Egypt-Israel gas supply deal subject to governments. Commenting on delay of the deal, Rigas said the issue was between the governments of the two countries and not between the business partners.
"It is between the Israeli and Egyptian governments to decide what can happen," he said.
Israel's Energy Minister Eli Cohen has said he was holding up the approval for the $35-B gas deal to secure better commercial terms for the Israeli market, Israeli media reported last week.
Rigas said that he still has confidence that obstacles could be removed.
"I believe that the obstacles will be removed because it makes sense for infrastructure to be placed to allow gas to be transported in the East Mediterranean," Rigas said. "I paid $47 MM already. If I didn't have confidence, it would not be a very wise decision," he added.
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