In a press briefing in Nicosia, Noble’s senior Vice President for the Eastern Mediterranean region J Keith Elliott said Noble has proposed an interim solution to the government for piping gas from its offshore concession in Cyprus’ Block 12 for the purpose of domestic electricity generation. “We’ve identified a possibility, an opportunity to essentially take an existing production facility in the Gulf of Mexico and to retrofit that facility and install it,” said Elliott. “I would say the technical work hasn’t presented any show stoppers as of yet. We continue to work with the government to really decide whether there is an opportunity and a valid case for economic development there.”
Noble identified an opportunity which it put forward for discussion, he added.

Last month, natural gas public company DEFA decided to terminate negotiations with preferred bidder, Russia’s Itera, to provide an interim solution for the supply of natural gas for power generation, arguing that the Russian proposal could not guarantee a significant reduction in the cost of electricity. DEFA then invited second-ranked bidder Vitol to submit an improved proposal, which according to reports, the latter did not do.
Officially, DEFA’s tender for an interim solution remains open.

Meanwhile, President Nicos Anastasiades has called for an independent assessment by the Auditor-general of the tender process, following questions over what exactly constitutes a significant reduction of electricity prices.
Elliott said Noble had a project team working on the technical aspects of the proposal which would see Noble extracting gas from the Aphrodite reservoir with a spar platform, believed to be the ‘Red Hawk’ currently located in the deepwater Gulf of Mexico. The gas would be brought ashore via a subsea pipeline. The proposal has a tight window, because the ‘Red Hawk’ platform is set to be decommissioned in January 2014. “Our best estimate is that we can do it in the second quarter of 2016, but we need to make the decision by the end of this year,” said a Noble official. Elliott said: “It’s an interesting project. So far as we know, no one’s actually taken one of these facilities and taken it out of service and removed it and relocated it in the way that we’re thinking.” The estimated cost of the project is in excess of a billion dollars, he said.

Asked whether the infrastructure built for the interim project could be used again, the VP said the wells drilled would be used again, and the pipelines would have some utility but could not answer on the future operational value of the spar platform. Regarding the recent downsizing of the estimated size of Block 12’s Aphrodite field, Elliott remained upbeat about the quality of the reservoir and the prospects of finding other fields within the block.
When starting exploratory work offshore Israel 15 years ago, Noble drilled a number of dry holes before confirming significant gas finds. “In Cyprus, we drilled one exploration well, we had one exploration success,” said Elliot.
And with one appraisal well, a significant gas field was confirmed. “This is a very high quality reservoir,” he said, adding that the deliverability of the well is “significant and very much on par with what we see in our high-rate wells in other parts of the world.” He added: “For us, it’s early days but we’re very excited about where we are in this country and the potential for hydrocarbon resources in offshore Cyprus.”

A recent appraisal well in Aphrodite showed a gross resource range ranging from 3.6 trillion cubic feet (tcf) to 6 tcf with a mean of 5 tcf; 2 tcf less than the original mean announced in 2011. The company has yet to decide whether a second appraisal well will be needed.

Noble is currently analyzing the data from a 3D seismic surveyover 1,100 square miles (2,849 sq km) in Block 12 which has given the company reason to be “very intrigued” and “excited” about other prospects in the block.
The data appears to suggest there are six more potential hydrocarbon fields, smaller than the Aphrodite find, in Block 12. The Noble official said the Houston-based company expects to pursue exploration drilling in the latter part of 2014. While not in a place to say what potential those half dozen potential deposits have, Elliot said the prospects were “significant”.

Noble also confirmed its commitment to setting up a liquefaction terminal (LNG) at Vassilikos, despite the lower gas estimates for the Aphrodite field. “We continue to think that LNG development is the appropriate way forward for monetising this resource,” said Elliott, noting however that it probably wasn’t the only way forward. While refusing to be drawn into how much gas Noble needs to find before it can make the Final Investment Decision (FID) for an LNG terminal, the VP stressed that Noble’s development plans are built around monetisation of all of Block 12, not just the one Aphrodite discovery.

The aim remains to come to a FID some time in 2016 after which it should take another four years to see Cyprus’ first gas exports from an LNG terminal, taking it to 2020. Assuming an interim solution is not found with Noble, and the FID is made in 2016, gas for the domestic market should come onshore in 2019.

Source: Cyprus Mail