Cyprus and Israel working on gas pipeline deal for export to Europe

(Patria) - Cyprus and Israel are working on a deal to build a gas pipeline that will transport natural gas from both countries to the Eastern Mediterranean island state, where it will be liquefied for export by ship to Europe and potentially elsewhere, Cyprus's Energy Minister said on Monday, AP reports.

Minister Giorgos Papanastasiou said he will visit Israel soon to reach a formal agreement. After signing the contract, the pipeline could be completed in 18 months. It will take two and a half years to build a liquefaction plant in Cyprus after investors are found.

So far, five significant gas fields have been discovered off the southern coast of Cyprus. Israel has 11 such fields: the largest, named Leviathan, contains about 623 billion cubic meters of gas. Papanastasiou said he will meet later this month with energy companies licensed to explore for oil and gas within Cyprus's exclusive economic zone - including France's Total, Italy's Eni, ExxonMobil and Chevron, to determine ways to cooperate on projects that would accelerate bringing their gas to market.

The minister said Israel has agreed to the Cyprus government's proposal for a pipeline and liquefaction facility, which Israeli Prime Minister Benjamin Netanyahu unveiled on Sunday. 

“The Eastern Mediterranean has enough (gas) fields. Most are located in Israel's exclusive economic zone, but Cyprus also has sufficient quantities for this project to materialize,” Papanastasiou told reporters.

The minister explained that this project is a shortened version of the EastMed pipeline idea. That proposal, for a 1,900-kilometer, $6 billion pipeline designed to transport regional gas directly to Europe, has fallen out of favor in recent years.

Instead of a direct pipeline connection to Europe, the processed gas from Cyprus could reach international markets by ship.

“When you have liquefied natural gas, it can go in any direction… Europe needs it more now, but markets can also be found in Asia,” Papanastasiou said. 

In December, the previous Cyprus government said it was considering a similar plan proposal as the war in Ukraine led to an energy crisis, AP reported.

Papanastasiou said Cypriot and Israeli authorities will need several more months to negotiate a separate agreement on how much gas from Cyprus's Aphrodite gas field falls within neighboring Israeli waters.
The proposal for a pipeline to transport Cypriot and Egyptian gas for liquefaction in Egypt remains separate from the Israeli-Cypriot plan, the minister said.