Cyprus Rethinks Leviathan Bid


Cyprus has opted to seek solutions to its natural gas needs from suppliers other than Israel, The Jerusalem Post reported on Monday.

The Cypriot Natural Gas Public Company (DEFA) decided not to extend a proposal for the purchase of gas from Israel’s Leviathan reservoir, the basin’s shareholders reported to the Tel Aviv Stock Exchange on Sunday.

Cyprus had been looking to the Israeli fields to supply its domestic market, but the ongoing wrangle between the Israeli Antitrust Authority versus Delek and Noble over  monopoly charges has resulted in a freeze on development of the Leviathan reservoir. As a result, Cyprus will not be able to receive gas from Leviathan in time to meet national demand, and so the country decided let the tender lapse, industry sources said.

“At this time, to the best knowledge of the partners, the Cypriot government is examining various options to supply natural gas to the domestic market in Cyprus, in addition to this tender, including the option of supplying natural gas from the Aphrodite reservoir in Block 12 of Cyprus,” the TASE report said.

Noble Energy holds 70% of Cyprus’s Aphrodite reservoir, while the Delek Group owns 30%. The two companies are also the main holders in the giant Leviathan and Tamar fields off the Israeli coast.

However, Delek and Noble, as the main shareholders in Aphrodite, are positioning themselves to fall back on that reservoir to supply Cyprus, according to sources.

Meanwhile, the two companies have sent delegations to Egypt to close a deal to supply the Egyptian market with gas for private industrial consumers before the end of 2015.

If successfully concluded, the move would revitalize Egypt’s East Mediterranean Gas Company pipeline that formerly gas from Egypt to Israel, by reversing flow of gas from Israel to Egypt.

In 2008, EMG began supplying Israel with about 40 percent of its natural gas provisions, until repeated sabotage of the pipeline in Egypt forced the Egyptian government to end the arrangement in April 2012.

“You don’t need to put in any infrastructure, just reverse the flow,” industry sources said. “Then the Egyptian market can be provided with gas on a very tight schedule.”

As the Egyptian government has already approved the new deal, a final signing of the contracts is fully expected in the coming months.

To Read The Full Story

Are you already a subscriber?
Click to log in!