Cyprus’ energy hopes rise as Ukraine crisis deepens

Cyprus’ energy hopes rise as Ukraine crisis deepens


By Kyriacos Kyriacou – Nicosia

As the crisis in Ukraine deepens, Cyprus seems to be seen as a key player in EU rush for alternative gas supplies. Policy makers have even gone as far as to hope that new gas routes could help end decades of division on Cyprus. And the timing of US vice president Joe Biden’s visit next week in the island is no coincidence. It is worth reminding that it will be the first visit by a US president or a vice president in 52 years!

The risk of investing in energy infrastructure in Cyprus seems to have been reduced as the crisis in the Ukraine unfolds, with the EU looking towards solutions that may cost more, but which will ensure its energy security, an EU informal meeting in Athens has heard.

The prospects of the Cypriot natural gas and the role of Cyprus in the region seem to be important, after discussions at the Informal Council of EU Energy Ministers, held on 15-16 May in Athens.

The Cypriot Minister of Energy Yiorgos Lakkotrypis referred to the exploration of gas fields in Cyprus` Exclusive Economic Zone (EEZ) and in the wider south-east Mediterranean to strengthen the energy security of the EU.

“The construction of onshore gas liquefaction plant in Cyprus and the emergence of Cyprus as an energy hub is at the top of our energy priorities,” said the Minister.

Lakkotrypis supported the immediate implementation of projects that will help to reduce energy isolation of the Member States and enhance EU energy security. He noted that the possibility of additional funding for these specific projects should be examined more extensively as they contribute to the achievement of EU priorities.

Strategy draft

Based on the discussion of the Ministers, the European Commission will draft a strategy for the security of energy supply, which will consist of an in-depth analysis of the situation and a study to reduce EU energy dependency.

These studies will be discussed at the Council of Energy Ministers in mid-June and the European Council that will follow.

At the same time an industry source involved in negotiations with Russia says that the geopolitical instability underlines the need for an all-European solution to bring gas from Israel and Cyprus to western Europe.  “That would create a win-win situation that would also improve the prospects for a peace settlement in Cyprus,” said the source.

Analysts say that the crisis over Ukraine has transformed the assessment of risk on investing in energy infrastructure in Cyprus.

Important meetings

On the sidelines of the Council, Lakkotrypis met with EU Energy Commissioner Gunther Oettinger and the Executive Director of the International Energy Agency (IEA) Maria van Der Hoeven. Lakkotrypis also held a private meeting with his Greek counterpart and President of the EU Energy Council Yannis Maniatis. The two Ministers reaffirmed their close ties and good cooperation between the two countries in the energy sector.

Lakkotrypis briefed the Greek Minister on recent developments in hydrocarbon exploration in the EEZ of Cyprus and government plans for the creation of the onshore gas liquefaction plant in Cyprus. Maniatis briefed the Cypriot Minister on developments to promote the EastMed gas pipeline between Israel, Cyprus and Greece.

Preliminary results of an appraisal well carried out by Houston-based Noble Energy for natural gas in Block 12 of Cyprus’ Exclusive Economic Zone estimate the hydrocarbon reserve between 3.6tcf and 6tcf with a gross mean resource of 5tcf. Total E&P Cyprus Ltd has been granted a license for seismic exploration for oil and gas in block 10 and in parts of blocks 6, 7 and 11 of Cyprus’ EEZ.