Address
by the Minister of Energy, Mr Y. Lakkotrypis,
at
the Conference on the security of natural gas supply,
in Malta
Allow
me first to welcome you all at the Energy
Conference, “Security of gas supply: the role of gas developments
in the Mediterranean region” and on
behalf of the Republic of Cyprus, to thank
you for your participation at the event.
I
would like to particularly thank the Government of Malta and the
Minister of Energy personally, for hosting this event at his
beautiful country.
As
of today, more than 35 tcf of natural gas have been discovered in
offshore Israel, approximately
5 tcf have been discovered in the Cyprus Exclusive Economic Zone
(EEZ) and, according to Lebanese officials, preliminary estimates
from seismic surveys show resources of about 30 tcf of natural gas in
Lebanon. In addition to the Aphrodite discovery in the Cyprus EEZ, we
are optimistic for further discoveries in the near future, as over
the next 12 to 18 months the exploration activities of our licensees
will intensify. Prospects appear very promising. Moreover, there are
encouraging indications for oil discoveries offshore Cyprus. Overall,
in 2010 the U.S. Geological Survey estimated that hydrocarbon
resources in the Eastern Mediterranean (Levant and Nile Delta Basins)
could be as much as 3.4 bbl of oil and 345 tcf of natural gas. It is
therefore becoming evident, that the region is a new promising source
for oil and gas supply, as well as an alternate transportation route.
There
has been - and still is - a sometimes heated debate, about the
optimum way that Eastern Mediterranean gas resources should be
transported to European and international markets. In light of the
complex and fragile geopolitical situation in the region, this
question could indeed be characterized as a multi-dimensional puzzle.
After
carefully examining all of the options, Cyprus has
put together a strategic monetization plan, with an Onshore LNG
facility
at
its
core
located
at
Vasilikos - at the
southern
shore
of
Cyprus, and convenient to process
all
gas discoveries in the Eastern Mediterranean.
We feel
that this option is the optimum infrastructure that would enable us
to transport gas to European and international markets. Optimum in
terms of both, the flexibility it can provide to Cypriot and regional
gas, and the commercial advantages
it entails.
Additionally,
it aligns perfectly with EU strategy of expanding its LNG
infrastructure base, as it can supply the current and planned
European Regasification Terminals, while remaining largely immuned to
risks
associated with the fragile political environment in the area.
We are
not oblivious to the commercial challenges that this option carries,
neither in terms of the required capital nor time-to-market. But we
are determined to face them responsibly and pragmatically. We are
confident that the Cyprus Onshore LNG Plant could be an important
first step towards the concept of the “Eastern Mediterranean Gas
Corridor”, within the framework of EU’s policy for the
diversification of external supplies and related infrastructure.
Up
until the beginning of the 20th
century, mankind used to believe that the Universe works in just
three space dimensions. That is of course until physicists discovered
that Time is an additional fourth dimension, which interestingly
forms a continuum to space itself. Allow me therefore to take
advantage of this discovery and travel you through time, towards our
vision for the Eastern Med region.
While
Cyprus has selected to start monetizing its
gas via an Onshore LNG Plant (and I emphasize the word Start) at
Vasilikos, it is very important that we take a moment away from
today’s reality and fast-forward ourselves several years from now,
envisioning an Eastern Mediterranean where:
- regional differences have been resolved and companies are operating in a stable, transparent and predictable business environment
- countries in the region are all interconnected, contributing to each other’s security of energy supply
- gas and oil are being transported to European and International markets in a variety of ways and through various routes
- countries in the region are managing their hydrocarbon revenues in a transparent, responsible manner, benefiting current and safeguarding future generations
- furthermore, take a moment to visualize a region that is exporting knowledge to the rest of the world.
One
might think that all these are wishful thoughts. And yet, when one
looks carefully, he or she can see that for every bit of these goals
there is activity which is being pursued today.
Discussions
are underway to settle the Cyprus Question
and so are efforts to resolve the EEZ boundary
dispute between Israel and Lebanon. Regional and international sales
of gas are being negotiated, while cooperation is being pursued at
all levels aiming at creating exactly the solid, transparent and
predictable business environment which I described earlier.
Riding
once again our time-machine, please allow me to carry you back to
today’s harsh realities. For this vision
to materialize, all countries in the
region must have the political will to act now,
guided by International Law and the values and principles upon which
the Union for the Mediterranean is founded. We are indeed
being confronted with a historical
opportunity to leverage natural resources as a source of cooperation
and conflict resolution -- and we must rise to the challenge.
Ladies and Gentlemen,
We
are
convinced that Cyprus,
being the only European
Union
member in the South Eastern Mediterranean region and a country with
excellent longstanding relations with all its Middle East neighbours,
is well positioned
to play a vital role in achieving this vision.
We
seek Europe’s support and strong engagement in securing the vital
but
delicate region of the Eastern Mediterranean as an alternative source
of energy supply and route, contributing to the EU’s energy
security.
Imagine not what it is today, but what it could be tomorrow. Using
footballing terms, Europe must seek to position itself not where the
ball is right now, but where the ball is actually heading to.
In
closing, I would like to recall what Winston Churchill once said:
“The pessimist sees difficulties in every opportunity,
whereas the optimist sees the opportunity in every difficulty”; the
energy potential of the Eastern Mediterranean region creates the
opportunity for peace, stability and prosperity in our area. We
recognize the difficulties in this opportunity, but our unwavering
aspiration is that optimism will be shared and prevail in the Eastern
Mediterranean.
Thank you for your attention.
_________________
