In 2011 the Republic of Cyprus confirmed significant offshore reserves of approximately 7 trillion cubic feet of natural gas in the country’s Exclusive Economic Zone (EEZ). In particular, 4.54tcf of reserves have been discovered in block 12, enough to service the domestic gas demand of Cyprus for the next hundred years. According to ENI’s estimations for block 6, the discovered reserves could exceed the 8 trillion cubic feet.
These reserves have given rise to an ambitious energy strategy and have created new challenges for the Cypriot shipping industry – the government and business communities of Cyprus also anticipate the relocation of the offices of many foreign shipping companies, so these companies can position themselves to reap the benefits of what has become an emerging energy market in the Eastern Mediterranean. According to a study by the Human Resources Development Authority, it is anticipated that more than 5,000 jobs will be created in the Republic’s hydrocarbon sector in the following years.
Plans are currently in place for the export of natural gas to Europe via an offshore subsea pipeline linked between Cyprus, Greece, Israel and Italy, for the transportation of natural gas. This project is called EastMed, a pipeline that would start about 170km off Cyprus's southern coast and stretch for 2,200km reaching Otranto, Italy through Crete and the Greek mainland.
There are currently 4 storage options for Cypriot natural gas:
- the installation of a Floating Storage and Re-gasification Unit (FSRU)
- natural gas pipeline installation for transporting natural gas from Israel
- import of natural gas as Compressed Natural Gas (CNG)
- construction of a small-scale re-gasification unit
The government of the Republic of Cyprus has initiated all necessary actions for the establishment of a Natural Gas Liquefaction Plant at Vasilikos to include facilities for the liquefaction of natural gas and the storage and export of liquefied natural gas (LNG) by tankers. It is an ambitious project of tremendous strategic importance, and it will also be the largest investment in the history of the country. It is expected to be a robust driver of economic growth, as it will serve the storage and transport needs of Cypriot natural gas deposits and, potentially, those of neighbouring countries.