Israel’s Delek proposes LNG plant in Cyprus, says MEES

Israel's Delek Group has proposed to Cyprus the creation of a liquefied natural gas (LNG) facility on the island to process reserves Israel has discovered offshore and Cyprus hopes to find nearby, according to a newsflash issued by the Middle East Economic Survey.
Delek has written to the Cypriot government proposing cooperation to set up a multi-purpose facility that would receive and process gas into LNG, at a site proposed by the Cypriot authorities.
The Israeli company is a partner of U.S. energy firm Noble, which has reported large reserves of natural gas in two offshore fields close to Israel since 2009.
Noble also has a concession to drill for hydrocarbons in a field in Cypriot waters, close to the Israeli finds.
Delek has been looking at options for exporting gas, which included building an LNG facility in Israel or Cyprus or exporting it through a pipeline to Greece.
Delek would supply gas from the offshore fields Leviathan and Tamar, some 60 kms south east of Cyprus, and suggested that any gas discoveries made offshore Cyprus could also be processed at the facility, the MEES report said.
Noble and Delek have described the Leviathan find as the world's biggest in the past decade, with an estimated 16 trln cubic feet (tcf) of gas, while Tamar was the largest gas find in the world in 2009, at 8.4 tcf.
Cypriot officials estimate that there are reserves in the region of 10 tcf in their block, about 65 km from Tamar.
MEES said a multi-purpose gas facility in Cyprus would probably include production of natural gas liquids, including liquid petroleum gas (LPG), in substantial quantities.
If realised, the report said the project has the potential to transform natural gas supply balances in the region and possibly impact transit projects through Turkey, including the proposed Nabucco pipeline, which has a design capacity of 31 bln cubic meters (bcm) a year.
The state run Electricity Authority of Cyprus recently concluded a consultation process to find a strategic partner to build a 600 mln euro ($779 mln) LNG regasification facility at Vassiliko along the southern coast of Cyprus.
The results of the consultation were not disclosed, pending government selection of a company to supply gas to Cyprus over a 20-year period. The island's energy minister has said Shell made the most competitive offer with a bid of around 4.5 bln euros.
Cyprus is seeking investors to build a new 300,000 cubic metre oil storage facility, estimated to be worth at least 100 mln euros, to be run jointly by the Cypriot government and the successful bidder for 25 years.
Meanwhile, Vitol subsidiary VTTI is about to start work on its own 100 mln euro energy terminal in the Vassiliko area, but the purpose of that venture with a 340,000 cubic metre storage facility would be primarily to store and re-export its own gas and petroleum to other markets.
Construction work by Joannou and Paraskevaides (J&P) will begin next week and concluded in one year giving an added boost to the island’s struggling construction industry.
The storage capacity for gasoline, diesel and jet fuel may increase to 550,000 cubic meters in Phase 2 of the project, totalling an investment in Cyprus of more than 200 mln euros.
“Establishing Cyprus as a major regional trading hub for the import and export of oil products, we are also confident that the expanded facility – after phase 2 – will provide more than sufficient capacity to cover the needs of Cyprus and bring competitive supplies of energy to its customers”, said VTTI’s CEO, Rob Nijst.
VTTI operates 11 terminals on five continents, including a new terminal in Florida, USA. In Europe, VTTI has major terminals in Rotterdam, Amsterdam, Antwerp and Ventspils, Latvia.