In a statement ending months of speculation on Cyprus' gas plans, Commerce Minister Neoclis Sylikiotis yesterday revealed that a decision has been taken to build a liquefaction plant for natural gas here.
"The decision for the creation of a liquefaction terminal has been made. What remains now is to press ahead with the planning for the next steps," Sylikiotis said in his address to the Cyprus Natural Gas Conference held in Nicosia.
The two-day conference - which concludes today - is sponsored by Ernst & Young Cyprus, bringing together people from industry, academia and politics. Yesterday's proceedings focused on global developments and the impact on the gas market.
Sylikiotis went on to say there is a great deal of interest from companies abroad in an LNG project here, including financial institutions. Last month Sylikiotis told the Mail he met with representatives of Deutsche Bank and Credit Agricole who expressed "a preliminary interest" in investing in a liquefaction terminal on the island.
He said also that the establishment of a state hydrocarbons corporation is a matter of weeks. Meanwhile the government has commissioned the Massachusetts Institute of Technology (MIT) to carry out a study on financial prospects from gas exploitation.
The minister revealed also that soon the government would appoint a team that would enter into negotiations with Noble Energy, which has a gas concession in Cyprus' Block 12. Up until now a government-appointed team was engaged in preliminary talks with the US company on the best way to commercialise the find at the 'Aphrodite' field.
The negotiating team's mandate, Sylikiotis said, would be to reach a "number of agreements which we must sign with the company." He did not elucidate.
During Q&A, the minister was asked to clarify the role of the state hydrocarbons corporation. He said that it would initially be 100 per cent owned by the state, although later on a small stake could be given to the private sector. Although a state company, it would be governed by private law, and would have authority handle all business relating to natural gas - including negotiations with companies, commercial deals etc.
From the audience, Ilan Diamond, a business executive involved in the Pelagic natural gas fields off the coast of Israel, informed the panel that exploratory drilling was expected before the end of the year in the part of the 'Aphrodite' field that lies in Israeli waters.
Cyprus and Israel are currently engaged in negotiations for a unitisation agreement regarding the gas-sharing and exploitation of reserves that fall on the maritime boundary between the two nations.
Noble has said it plans to carry out follow-up appraisal drilling in the Cypriot field in Q4 or early next year.
In response to a question, Sylikiotis said the unitization agreement would not be on the agenda of his talks with Israeli officials when he visits Tel Aviv this weekend. The matter is being handled by the Foreign Ministry, he said.