Energy Minister Giorgos Papanastasiou said on Tuesday that the government is currently evaluating Energean’s proposal to build a subsea natural gas pipeline linking Israel’s Karish and Karish North fields to Cyprus.
Speaking at the 13th Energy Symposium in Nicosia, Papanastasiou noted that two separate projects are on the table for importing natural gas and that the government will decide how to proceed. From the interventions and presentations at the conference, it became clear that Cyprus will need a portfolio of projects to achieve energy security at an affordable cost, with the various schemes viewed as complementary rather than competing. These range from energy storage and electricity interconnections to the LNG terminal at Vasilikos and pipelines from fields in the wider region.
Energean, for its part, is waiting on a political decision by the government to lift the “emerging market” designation of the Cypriot gas market, which currently allows DEFA (the Natural Gas Public Company of Cyprus) to be the sole fuel supplier in the domestic market. That change is seen as a prerequisite for moving ahead with the pipeline.
Support from the electricity authority
Electricity Authority of Cyprus (EAC) chairman Giorgos Petrou publicly backed the Energean project at the symposium and expressed the hope that it will be built. Such a development, he said, would allow natural gas to supply generation units in Dhekelia as well.
Petrou agreed that Energean’s proposal does not compete with and does not replace the Vasilikos terminal project, but would instead complement it.
What Energean is proposing
Energean’s plan involves the design, construction, ownership and operation of a new subsea pipeline of approximately 200 kilometres. The line would connect the Energean Power FPSO, which produces from Israel’s Karish and Karish North fields, with Cyprus and the Cyfield Group’s power generation facilities at Mari.
Energean has already signed a Letter of Intent with the Cyfield Group for the transport of 0.3 billion cubic metres of gas per year. The company says the pipeline could be operational within 12 months from the moment all necessary permits are issued.
The project requires approvals from the governments of Cyprus and Israel. Israel’s ambassador to Cyprus, Oren Anolik, used the conference platform to express his government’s support. The project would be implemented with private financing, with the investor bearing the risk.
Energean CEO Mathios Rigas told the symposium that the company “recognises the current status of the Cypriot market, which was designated as ‘emerging’ by the previous government in order to protect monopoly conditions.”
“Today the Cypriot government has the opportunity to reform the institutional framework and align the market with the competitive conditions required by the EU for all member states,” he added.
“Our proposal offers a practical and economic solution to end Cyprus’s energy isolation, providing immediate access to natural gas from a neighbouring country and supporting the transition to a cleaner and more sustainable energy reality, while also contributing to the development of domestic fields for export via Egypt,” Rigas said.
Towards a deal on Aphrodite–Ishai
At the same symposium, Papanastasiou announced that the intergovernmental agreement between Cyprus and Israel on managing the Aphrodite–Ishai reservoir is in its final stage of drafting. The goal is to sign the agreement by the end of the year.
The deal will set out how to manage the small section of the Aphrodite field that extends into the Ishai area and covers quantities of natural gas that may lie within Israel’s Exclusive Economic Zone. It will also define a compensation mechanism for the Israeli side’s license holders for the share that corresponds to them.