Limassol: Cyprus’ Energy Outlook

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By Charles Meaby, General Manager, DP World Limassol

With Cyprus standing at the crossroads between Europe, Africa and the Middle East, it already possesses the inherent advantages as a hub destination. The success of the DP World terminal at Limassol is testimony to this, as it currently provides stellar passenger and logistics services to the surrounding markets. However, a less discussed area for Cyprus is its latent potential as an energy global hub.

The Deepwater Aphrodite gas field was discovered in 2011, due south of Limassol and within the Cypriot Exclusive Economic Zone. Appraisal wells estimate that reserves there hold a whopping five trillion cubic feet of quality gas in supply.

Given Cyprus’ local demand is minor, most of the production will be for export. Yet, the size of the field means that an onsite liquefied natural gas (LNG) facility for export is unfeasible, which opens up the opportunity for a cost-effective site for both exploration and onshore operations.

Projections from the International Energy Agency provide a window to the future of the global energy mix, a future where oil, and gas in particular, have a role to play alongside renewable energy. The IEA project that, in a sustainable development scenario, gas demand will increase by 20% by 2030, with natural gas becoming the largest single fuel in the global mix.

What does this discovery or any other prospect discoveries mean for the Cypriot economy? Research suggests that the impacts of such economic drivers on islands – both small and large – are slightly differentiated from that of mainland destinations. For instance, Cyprus’ organisational and

economic structure tends to be epitomised by the prevalence of small enterprises, such as tourism. The regular and predictable flows of workers between on and offshore environments, and the reams of jobs that will be created in the energy supply chain, will help to stimulate both local economies and the national economy.

Cyprus’ hydrocarbon future is being realised – and enabled – through DP World Limassol. The Oil and Gas logistics services zone is 100,000 m2 with a 430m dedicated berth along with the rest of 1.2km berths available, with full environmental impact assessment and relevant permits. Previously, it has been used to support ENI’s recent successful Cyprus EEZ offshore drilling campaign. Other international Oil companies, such as Exxon Mobil, have also nominated DP World Limassol Oil and Gas zone as its planned drilling logistics base.

The facility itself has the flexibility to respond quickly and sensitively to client demands – a must in the volatile world of fossil fuels. Leveraging the full strength of our global resources and know-how, the facility can host a fleet of highly capable and versatile vessels that can provide the full suite of techniques for offshore operation.

Most importantly, through our port-centric operation model, we can offer facilities that incorporate supply base services with subsea services and fabrication, and an industrial estate for supply and service companies. Our interest is in developing sites, assets and businesses that become the centre of the incumbent communities and surrounding industry.

In December this year, Cyprus and Israel both signed up to an EU-backed initiative to construct a 2,000km undersea pipeline to carry 1.6 billion cubic feet of gas per day to Greece and Italy at the cost of €6 billion. Undoubtedly, there is a clear demand for the resources held in Cyprus, and through DP World’s facilities and expertise, they can be accessed and distributed that much easier.

With the demand for gas only going in one direction, and technological advances making more fields accessible and economically viable, port operators need to better understand the implications of accommodating such facilities and have the flexibility for a multiuser port facility. For those operators who have the capacity to accommodate such facilities as well as the expertise to accompany it, the potential is as immense as the resources in the ground.

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