The chief executive of energy company Eni said Tuesday that Cyprus-Israeli plans for a pipeline to move offshore natural gas from the two countries to Cyprus is “part of our discussion” with the Cypriot government. The gas would be processed for electricity generation and possible exportation.
Eni CEO Claudio Descalzi said after talks with Cyprus President Nikos Christodoulides that any plan to develop gas deposits discovered off Cyprus’ southern coast “must have economic value.”
Descalzi said talks focused primarily on Eni’s plans to drill by the end of the year an additional well in Block 6 — one of seven areas inside Cyprus’ exclusive economic zone where the Italian company along with partner Total of France hold licenses for hydrocarbon exploration.
“We always support the government because they asked us, we work with them and clearly everything must have an economic value, but clearly we are working together. So it’s part of our discussion,” Descalzi said in response to an Associated Press question.
Cyprus Energy Minister George Papanastasiou said talks also revolved around how quickly discovered gas deposits can be developed as part of the Cypriot-Israeli two-pronged plan.
Eni views the pipeline project in combination with a processing plant to liquefy natural gas for export by ship “favorably,” Papanastasiou said, on condition that more deposits are discovered to make the construction of such infrastructure economically viable.
The Cypriot energy minister said the plan is in two phases. The first foresees a pipeline to bring Israeli and Cypriot gas to the island nation for electricity generation to be consumed domestically with excess supply conveyed back to Israel via an undersea electricity cable.
The second phase foresees construction of a plant to convert natural gas to liquid so it can be exported to Europe and elsewhere at a time when the continent seeks to diversify its supply in the wake of Russia’s invasion of Ukraine.
Papanastasiou said Cypriot authorities will meet again with Eni officials in the near future for a more in-depth discussion on expediting development plans.
Two major international oil and gas companies have already expressed interest in the Israeli-Cypriot plans, Papanastasiou had told the AP last month.
The project’s key drawing card for energy companies is its low cost relative to other exporting methods, such as an idea for a 6 billion-euro ($6.5 billion), 1,900-kilometer (1,180-mile) pipeline connecting east Mediterranean gas deposits directly to Europe.
That relatively low cost would mean companies would recover their initial investment and turn a profit much quicker.
The roughly 320-kilometer (200-mile) pipeline is estimated at 450 million euros ($489 million) and the liquefaction plant at 1 billion euros ($1.1 billion).
