LNG Plant Development at Cyprus

8/10/2019 LNG Plant Development at Cyprus

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Constantinos Christodoulou - @00316650

LNG Plant Development at Cyprus


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Cyprus Overview Third largest island in

the Mediterranean sea

Located at thecrossroads of biginternational routes

Full member state of

the European Union

Energy isolated island:no oil, natural gas orelectricity connectionswith other countries

Almost the total energydemand met throughthe consumption of oilproducts

Electricity generation isalmost 100% oil fired


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Introduction The Government of Cyprus, through its Council of Ministers, has

decided to establish and is in process of developing an Energy Centerat 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 andre-gasification terminal

An oil products import, storage (both operational and strategicreserves) 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)


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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 nonhydrocarbons that exists either in gaseous phase or in solution in crude oil innatural undergrounds reservoirs

LNG is natural methane gas that has been chilled at -160 oC using a methodcalled 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 0o

C

The transportation of LNG is achieved by using LNG ships that contains specialvessels. For storage, we use specially engineered tanks


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Oil and gas world data (1)Fossil fuels emissions levels

Pounds per billion Btu of energy inputWorld energy demand by fuel


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Oil and gas world data (2)


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Potential hydrocarbon blocks


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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) inOctober 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 toquantify in detail gas deposit

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

Plans in progress for 10 billion investment for liquefaction plant


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Energy system at Cyprus

CyprusEnergySystem

High Degree ofdependence on

imported Oil High increaserates of energy

consumption

High costof energy

supply

Limited oilStoragecapacity

Seasonalityon energydemand

Environmentalconstrains

Marginaloperation of

electricitysystem on peak

demand

High potentialof energy

conservation

Significantpotential ofrenewable

sources

Isolatedenergysystem


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Cyprus Energy Policy

clean

Costeffective

Sufficiency

Secure

Potential offshore natural gas discoveries:

Make Cyprus an exporter of natural gas

Modernize Cyprus economy and enhanceenergy outlook

Improve countrys trade balance andlessen carbon dioxide emissions

Establish an industry related to natural gastechnology/services

Provide the revenue to invest in renewableenergy sources & energy saving

Create employment prospects

Develop alliances increasing national

security


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Natural Gas Market According to EU, Cyprus qualifies

and is classified as an Emergentmarket for natural gas and also asan Isolated market for 20 years

The gas sector, according to thelast law regulating the natural gas

market, shall be fully monopolisticfor a period of 20 years

The natural gas public company(DEFA), which is controlled by thestate, has been appointed by

Government as the only Importerand Distributor at Cyprus(includes any form of natural gas)

DEFA is currently in discussionswith the Government to widen itsrole and activities

Natural GasPublic Company

DEFA

Import

Storage

Transmission

Distribution

Supply

Trading


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Consumption in EU by country


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Necessity of Energy Center The establishment of the Energy Center will assist Cyprus towards the

following:

Achievement of its combined aims for the diversification ofenergy sources

Security of energy supply and reduction of CO 2 emissions inorder to meet the requirements of the EU directivities Achievement of its obligations of building strategic storagereserves for petroleum fuelsImprovement 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


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Energy Center Implementation


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Energy Center Site Map


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Energy Center Possible Model


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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


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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 muchmore faster as a solution)

Floating plant (floating, production, storage and offloading).


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Gas Import - Pipeline

Gas pipeline route from Cyprus A

185 Km

Gas pipeline route from Leviathan

205 Km


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Offshore LNG plantConsider to be the fastest solution but the most expensive also


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Gas Market Outlet - LNG

LNGflows


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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


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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 theimport, storage and re-gasification of LNG. The supply of LNG toCyprus constitutes the first and exceptionally important stage in thechain of import and use of natural gas at Cyprus

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

EAC requires strategic partners for the establishment of a Joint VentureCompany for the development, financing, operation, maintenance andmanagement of the onshore LNG terminal


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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


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Thank you for your attention!

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LNG Plant Development at Cyprus