The “Aphrodite” natural gas field discovered in Cyprus` exclusive economic zone (EEZ) has been declared commercial by the three companies Noble Energy, Delek and Avner, that own the rights of the field (Noble holds a 70% working interest in the ‘Aphrodite’ gas field, while Delek and Avner each hold 15%).
The declaration of commerciality confirms the existence of substantial recoverable natural gas reserves in exploration block 12 of Cyprus’ EEZ, which is the first step as much more needs to be done before the Cypriot state can receive the first revenues. Declaring commerciality sends the message to foreign buyers that we have natural gas for sale. This means that it can be for export or used in Cyprus, or a combination.
Following this confirmation of its viability, the companies must now submit a Development and Production Plan for the field to the local Government. It’s expected to include the companies’ collective proposal with regards to the method and timeline for the development and production of the reserves, as well as their plan for the sale and marketing of the hydrocarbons.
For projects of this scale, four key elements must be in place for development, according to the company:
1. Regulatory certainty.
2. Commercial resources: the companies filed a Declaration of Commerciality, reflecting that they believe the quantity of resources is sufficient to support development.
3. Technical engineering design work and procurement planning, which are part of the development plan.
4. Identifying buyers for the resources at terms adequate to underpin investment in and financing for the project.
This comprises another significant step towards the monetization of the country’s indigenous natural gas reserves, both for domestic electricity generation and other uses, as well as exports via direct subsea pipelines to neighbouring countries. Plans call for floating production storage and offloading vessel (FPSO) to process 8 bcm of gas a year and the construction of underwater pipelines connecting the well to Cyprus and Egypt will optimize the usage of gas infrastructure and will generate added value for both countries.
“Aphrodite” field discovery is a tremendous opportunity to the next phase of exploitation, which can bring prosperity to the people and Government of Cyprus, as well as other countries in the region.