NICOSIA, Cyprus – A move by British oil and gas company BG International to buy a stake in Cyprus’ offshore mineral deposits is an important step forward for the country’s plans to supply Egypt with natural gas, the east Mediterranean island’s energy minister said Monday.
Yiorgos Lakkotrypis said U.S. company Noble Energy has cut a deal with BG International for a 35 per cent stake in an area, or block, where a field estimated to contain more than 4 trillion cubic feet of gas has been found.
Lakkotrypis said the deal is a vote of confidence on the commercial prospects of Cyprus’ offshore gas deposits. It also boosts the chances of developing the gas field since BG operates a gas processing plant in Idku, Egypt.
“It’s very important that commercial interests are becoming aligned with our efforts to supply gas to Egypt,” Lakkotrypis said.
BG said in a statement Monday that the field offshore Cyprus “provides a potential source of gas to Egypt.”
No financial terms were disclosed. Noble will remain the block’s operator and keep a 35 per cent stake in it. Israeli companies Delek and Avner each have a 15 per cent stake.
BG’s Egypt gas processing plant can liquefy the fossil fuel for transport by ship to markets that could include Europe.
Lakkotrypis said the deal is important also because BG could share in the cost of bringing the gas to market, estimated at 2-3 billion euros ($2.13-3.19 billion).
The comments echo those made in September by the CEO of Italian energy firm Eni, who claimed it would be possible to bring gas from offshore Cyprus to the company’s Damietta plant in Egypt, where it could be processed for export to Europe.
In August, Eni announced a discovery off the coast of Egypt that it called the “largest-ever” ever made in the Mediterranean Sea. The company is also licensed to search for gas in three areas off Cyprus.