Despite Cyprus’ crushing debt and concerns of economic collapse, the island is looking at a $10 billion liquid natural gas terminal to exploit its large reserves of gas deposits. Obviously, Cyprus as a nation would be hard pressed to find an extra $10 billion lying around and has approached Israel’s Delek Drilling and the States-based Noble Energy. Not only has Cyprus approached them, but each company has recently sent a delegation to the island nation.

Cyprus

“Delek confirmed strong interest in our plans and that they are very interested to invest in our export facility,” Charles Ellinas, chief executive of the state-owned Cyprus National Hydrocarbon Company, said.

It’s Cyprus’ hope to begin exporting LNG by the year 2020. In addition to processing its own gas, the facility would be used to process Israel’s gas deposits and potentially Lebanon’s.

Cyprus found 200B cubic meters gas in Aphrodite filed

Cyprus has found almost 200 billion cubic meters (bcm) of gas in its Aphrodite field, and has hopes of finding as much as one trillion cubic meters in its six exploration areas. At least one company is also looking for oil as part of this exploration.

Based on the terms of a recent European bailout, Cyprus needs to restructure its economy and if a trillion cubic meters of gas were to be found in the exploration areas, it would be worth around $400 billion at current European gas prices and give Cyprus enough gas to cover all of Europe’s demand for two years.

“Developing and introducing domestic gas will be critical for our competitiveness,” Minister of Energy, Commerce, Industry and Tourism Yiorgos Lakkotrypis told Reuters in a phone interview. (With a title like that it’s not a stretch to see why Cyprus’ economy finds itself in such shambles, that’s one hell of a department.)

Italy and France May Step Aside, Leaving Europe Market Wide Open

“We are committed to sending gas to Europe and are very keen to maintain good relations with Europe,” Cyprus National’s Ellinas said.

“Italy and France are interested in our gas for strategic reasons to supply Europe,” he said.

“(Italian and French energy companies) ENI and Total also have assets in East Africa, where a lot of gas has also been found, but they will send those supplies to Asia and therefore Cyprus gas can be used to supply Europe.”

Given Cyprus’ proximity to the Suez Canal, these statements sound a lot like lip service to placate those responsible for bailing out the Cypriot economy. The LNG demand of both Japan and South Korea would certainly see quite a bit of LNG making its way to Asia.

Given the potential political difficulties and inherent fragility involved in any cooperation between Israel and Lebanon, Cyprus believes it could provide a simple, albeit $10 billion, solution.

“Israel and Lebanon don’t need to cooperate directly, but instead, both could be accommodated in Cyprus to export their gas,” Ellinas said.