Cyprus in Plan to Develop a Natural Gas Industry
From The New York Times
By Stanley Reed
Cyprus, seeking to rebuild its economy after the collapse of its banking industry, will announce on Thursday an agreement with Total, the French oil giant, to develop a plant to liquefy natural gas, the Cypriot energy minister said.
Many questions remain, including where the gas would come from, given that Cyprus’s own offshore natural gas reserves have yet to be developed — or even fully explored. But the government is intent on liquefying natural gas to turn it into a shippable export product, part of a long-term strategy to pull the economy out of the deep recession that followed its financial crisis this year.
The deal with Total is highly speculative, though. The pact will be nonbinding and will depend on Total’s discovering gas in the offshore areas it is now exploring.
“Total follows with interest and supports the government’s efforts to promote the development of a gas liquefaction project in Cyprus, whose membership in the E.U. is a major asset,” the company said.
Building the facility, which could cost as much as $6 billion, “is not going to solve all the problems,” the energy minister, Yiorgos Lakkotrypis, a former Microsoft executive, said in an interview on Tuesday in London. “But it is going to go a long way for psychological reasons.”
Converting natural gas to liquefied form makes it feasible to export by ship, rather than requiring the construction of new pipelines.
Cyprus is still years away from having a natural gas industry of any sort. But the involvement of Total would give credibility to the effort. “What it potentially brings is an experienced player into the monetization of Cypriot gas,” said Catherine Hunter, an analyst at IHS, a market research firm in London.
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