Constantinos Christodoulou - @00316650

LNG Plant Development at Cyprus

Cyprus Overview
Third largest island in
the Mediterranean sea

Located at the
crossroads of big
international routes

Full member state of
the European Union

Energy isolated island:
no oil, natural gas or
electricity connections
with other countries

Almost the total energy
demand met through
the consumption of oil
products

Electricity generation is
almost 100% oil fired

Introduction
The Government of Cyprus, through its Council of Ministers, has
decided to establish and is in process of developing an Energy Center
at the Vasilikos area in the boundaries of Limassol and Larnaca cities

The Energy center will compromise of the following:

An onshore Liquefied Natural Gas (LNG) import, storage and
re-gasification terminal
An oil products import, storage (both operational and strategic
reserves) and handling/distribution depot

The two terminal will be located next to the Vasilikos Power Station,
which is owned and operated by the Electricity Authority of Cyprus
(EAC)
Why natural gas?
Natural gas is the cleanest-burning conventional fuel leading to lower emissions
of greenhouse gases and local pollutants

Natural gas is a mixture of hydrocarbon and small quantities of non
hydrocarbons that exists either in gaseous phase or in solution in crude oil in
natural undergrounds reservoirs

LNG is natural methane gas that has been chilled at -160
o
C using a method
called liquefaction

At liquid phase, natural gas is condensed to 1/600
th
of previous volume .In order
to be gas again, it must be warmed to 0
o
C

The transportation of LNG is achieved by using LNG ships that contains special
vessels. For storage, we use specially engineered tanks
Oil and gas world data (1)
Fossil fuels emissions levels
Pounds per billion Btu of energy input
World energy demand by fuel
Oil and gas world data (2)
Potential hydrocarbon blocks
History Dates
First international round of licensing for 1 out of 12 offshore blocks in 2007

Noble Energy bids successfully and is awarded Block 12 (Aphrodite) in
October 2008. Enters into production sharing agreement in August 2011

Noble Energy announces major gas find in Block 12 estimated to hold 80-
250 bCMs in November 2011

Further exploration work planned on Block 12 by Noble in order to
quantify in detail gas deposit

Second international round of licensing ended in June 2012. Results are
still expected in order to know the highest bidder

Plans in progress for 10 billion investment for liquefaction plant
Energy system at Cyprus
Cyprus
Energy
System
High Degree of
dependence on
imported Oil
High increase
rates of energy
consumption
High cost
of energy
supply
Limited oil
Storage
capacity
Seasonality
on energy
demand
Environmental
constrains
Marginal
operation of
electricity
system on peak
demand
High potential
of energy
conservation
Significant
potential of
renewable
sources
Isolated
energy
system
Cyprus Energy Policy

clean
Cost
effective
Sufficiency
Secure
Potential offshore natural gas discoveries:

Make Cyprus an exporter of natural gas

Modernize Cyprus economy and enhance
energy outlook

Improve countrys trade balance and
lessen carbon dioxide emissions

Establish an industry related to natural gas
technology/services

Provide the revenue to invest in renewable
energy sources & energy saving

Create employment prospects

Develop alliances increasing national
security
Natural Gas Market
According to EU, Cyprus qualifies
and is classified as an Emergent
market for natural gas and also as
an Isolated market for 20 years

The gas sector, according to the
last law regulating the natural gas
market, shall be fully monopolistic
for a period of 20 years

The natural gas public company
(DEFA), which is controlled by the
state, has been appointed by
Government as the only Importer
and Distributor at Cyprus
(includes any form of natural gas)

DEFA is currently in discussions
with the Government to widen its
role and activities

Natural Gas
Public Company
DEFA
Import
Storage
Transmission
Distribution
Supply
Trading
Consumption in EU by country
Necessity of Energy Center
The establishment of the Energy Center will assist Cyprus towards the
following:

Achievement of its combined aims for the diversification of
energy sources
Security of energy supply and reduction of CO
2
emissions in
order to meet the requirements of the EU directivities
Achievement of its obligations of building strategic storage
reserves for petroleum fuels
Improvement of the competiveness and efficiency of the Cypriot
oil industry, through modernization and economies of scale

It is anticipated that the oil products terminal will be operational in 2016,
while the LNG terminal will be operational in 2017

Energy Center Implementation
Energy Center Site Map
Energy Center Possible Model
Energy Center Layout
Facilities for Cyprus operational products storage needs (Fuel oils, LPG, Bitumen,
Marine oil, Biofuels)

Regional oil storage hub

Terminal for reception and storage of LNG
Available Options
Pipeline to Greece, via Crete, and then to South Italy (estimated cost
more than 12 billion)

Land based liquefaction plant in Vasiliko (est. cost around 10 billion)

Offshore LNG plant (More expensive than land based plant but much
more faster as a solution)

Floating plant (floating, production, storage and offloading).
Gas Import - Pipeline
Gas pipeline route from Cyprus A
185 Km
Gas pipeline route from Leviathan
205 Km
Offshore LNG plant
Consider to be the fastest solution but the most expensive also
Gas Market Outlet - LNG
LNG
flows
Cyprus EU energy security
CERA and EAC are investigating the possibility of supply LNG to Cyprus
through bilateral interstate meetings and discussions with LNG producing
countries. Egypt and Israel has been visited in the past and recently

The estimated local demand estimated from 0,9 bcm in 2013 to 2 bcm in 2035
Conclusions - Summary
The Government of Cyprus has decided to introduce natural gas into its
energy mix and thus establish an onshore LNG re-gasification terminal

The onshore LNG terminal at Vasilikos will include facilities for the
import, storage and re-gasification of LNG. The supply of LNG to
Cyprus constitutes the first and exceptionally important stage in the
chain of import and use of natural gas at Cyprus

Cyprus requires a supplier of LNG on a long-term basis for the
requirements of the Cypriot natural gas market

EAC requires strategic partners for the establishment of a Joint Venture
Company for the development, financing, operation, maintenance and
management of the onshore LNG terminal
Acknowledgements
Energy Services of Cyprus Ministry of Commerce Industry and Tourism

Electricity Authority of Cyprus (EAC)

Natural Gas Public Company (DEFA)

Cyprus Energy Regulatory Authority (CERA)

Institute of Energy for South East Europe (IENE)

Pytheas Investors Service
Thank you for your attention!
Questions ?