Cyprus 'Could Be Gas Exporter'

Cyprus could become an exporter of natural gas, bringing major benefits for its economy and people, an energy industry executive said this week.

Adam Hedayat, vice-president for the Mediterranean, Middle East and Africa for Canada-based CNG transporter Sea NG Corporation, told The Cyprus Weekly: “Of course, it’s quite feasible for Cyprus to become an exporter of natural gas once the offshore find is confirmed and developed.

“Until Noble Energy drills towards the end of the year, it’s still under study.”

“The drilling will confirm the volume, the pressure, the quality of gas, and all these items. After that, of course, the project has to be developed and, depending on the volume of natural gas that is there and if the find is as large as the Israeli find, there will be plenty of gas that would be way, way more than the Cypriots need.

“So it becomes practical and good for the economy to export that.”

According to Hedayat, depending on the volume and the markets available, Cyprus would be able to export natural gas in the form of compressed natural gas (CNG). Sea NG provides transportation with ships.

“Smaller volumes would be able to be exported to places like Crete, Malta and the Greek islands.

“For very large volumes, a liquefied gas facility could be built in order to export larger volumes for larger markets. So, Cyprus can diversify between smaller markets, with sometimes higher profits but small volume, versus the larger markets that get the liquid natural gas, which is more like a commodity, like oil, with prices changing every day in the market,” Hedayat said.

CNG is normally traded through long-term contracts of five to fifteen years, and there is less variability of price.

“Cyprus has had many options and choices when it comes to natural gas.

“The Israelis are one possibility and they have offered to bring their natural gas here and build a liquefied natural gas (LNG) facility to export to the world. And there is also discussion around the Israelis for bringing gas through compressed natural gas (CNG).

“I think, given the quantity that is required for Cyprus that’s more realistic with less cost. It’s all realistic, but it’s a matter of cost, risks and time limits.”

Hedayat referred to the Egyptians who have also offered CNG to Cyprus in the past.

“All this makes the issue confusing. Cyprus has too many choices and they are all good. They all have their own risk and price and their own time line. The two main options I’m aware of are the Egyptians, but Egypt is going through turmoil right now, and I don’t know the status of that, and the Israelis who have a lot of gas, more than their requirements.

“It makes perfect sense to bring the CNG from the Israelis because it can happen very quickly. They said they will have their natural gas ready by 2012 and our fleet can deliver in 28 months from the time of signing all the contractual requirements.

“So, Cyprus can have natural gas by the third quarter of 2014.That’s a short term solution that can work for three to four years until the longer term solution would be in place.

“If it’s confirmed that there is a major find of Cypriot gas, it will take time to bring in since it will come by pipe and Cyprus can use a little bit of it and export a lot of it through CNG and LNG, mostly LNG. The same fleet that would bring the Israeli gas can be redeployed to export the excess natural gas right away to the Greek islands and other locations in the Mediterranean.”

Natural gas would make life cheaper for Cypriots but it would depend on the government policy that would be implemented, Hedayat said, noting that Cyprus would save a great deal with natural gas and bring major revenues for the island.

Hedayat was in Cyprus to give a lecture on the reality or myth of natural gas to Cyprus, organised by the Cyprus Canada Business Association and under the auspices of the Cyprus Chamber of Commerce and Industry (CCCI).

“Natural gas for Cyprus is a reality. There are many good options that Cyprus has. The art is to be able to integrate these options to determine what is short term, midterm and long term, what the risks are for each option and to integrate them in such a way so that Cyprus can benefit from the total integrated solution. Natural gas is a reality for Cyprus that would take will, leadership and vision.

“In the short term, if a CNG solution is implemented, I believe Cyprus can save between $170m to $350m per year on fuel costs. Natural gas is an opportunity for Cyprus that needs perseverance - which means getting the work done in order to capitalize on the opportunity.

“Financial benefits for Cyprus would mean reducing fuel costs which would then bring down the cost of electricity and if you have the vision, you can have cars and buses running on natural gas.

"You can also have natural gas delivered to houses that can be used for cooking and heating.

“The natural gas project could create employment and jobs and exporting natural gas would bring extra revenue, of course. Natural gas would also allow Cyprus to meet the EU environmental requirements. CNG would provide the possibility for Cyprus to export natural gas early and create benefits for the country early,” Hedayat said.

Imports up 5.3%

Total imports/arrivals in January- February amounted to €978.6m compared to €929.3m last year.

Total exports/dispatches (covering total exports to third countries and dispatches to other Member States) reached €207.5m from €156.7m in January-February 2010.

The trade deficit was €771.1m from €772.6m last year.

During February 2011 total imports/ arrivals were valued at €512.2m while total exports/dispatches, including stores and provisions, amounted to €110.7m. Εxports/dispatches of domestically produced goods, including stores and provisions, were €54.4m whilst exports/dispatches of foreign goods were €56.3m.