An interesting article was published on defencegreece today, which was written by Peter Wallace MEng. an energy consultant with more than 30 years of
experience in the oil and gas, petrochemical, and power generation
sectors. It gives a good insight on the “technical aspects” associated with the scheduled drilling in Cyprus’ EEZ.
He says that the need for cooperation between the Turkish and Greek Cypriots should be broadened from the political level to technical matters. The region could do well from drawing from the Norwegians ability to strategically exploit their North Sea reserves and their early understanding of the need to identify their need to confront national administrations and import technically formidable expertise. Norway has become one of the world’s leaders in offshore oil and gas technology and exploitation.
It is this importation of expertise, in his opinion, that appears to have thus far been overlooked and I have only read a small number of articles that have addressed the problem. Although the ownership and drilling rights issues are hugely important, the practical matters of what will happen if the drilling that is being planned, confirms the size of the estimated subterranean reserves, seems to have been forgotten. High level governmental agreements are vitally important for the transfer of specialised know-how.
Wallace underlines that the sooner such agreements are formalised the better.
He says that for any sensible exploitation to take place, Israel and Lebanon would need to cooperate and the Greek and Turkish Cypriots would need to put aside, for a while, their past differences and all of the parties jointly recognise that the entire region could benefit from the discovery. Consider also that the amount of gas estimated so far is equal to half the known reserves of the United States which has a population of almost 310 million and then consider that the total population of the territories claiming ownership rights to the two main fields in the Levant Basin is only around 13 million people.
His argument is that if there were any sense to any of this then the parties should be considering now what their options are and they should start considering the most beneficial method of exploiting this huge amount of gas. Some recent articles have mentioned the possibility of exporting the gas via pipeline to the EEC mainland. If this pipeline needed to be routed through Turkey because of the depth of the Mediterranean between Cyprus and mainland Greece, then an amicable relationship between Turkey and Greek Cyprus must be formed.
Another option, in his opinion, would be to build a liquefaction plant to produce Liquefied Natural Gas (LNG) but the size, the scale, and the costs of building a plant big enough to handle the volumes of gas involved are immense. In todays money, an estimate of costs for a plant capable of producing in excess of 10 million tons of LNG per annum, and coming on stream in about eight to ten years time, would be in excess of USD$10 billion. And to put this sum in perspective, the 2010 GDP for Cyprus was USD$25 billion.
The parties involved should already be carrying out feasibility and concept studies to look at their options with regard to potential site locations. It may be that because of the size involved that a land reclamation site may be needed or even an offshore facility.
The author worked on the feasibility study of the Browse LNG plant in NW Australia in 2006 and 2007, where the 20 trillion cubic feet of exploitable gas required a 15 million ton per annum liquefaction plant, and was designed to operate for 25 years. A natural gas liquefaction plant of the size needed to commercially exploit the deposits in the Levant basin would need a power generation plant capable of producing in excess of 400MW to operate. To put this amount of power in perspective, 400MW was about half of Cyprus’ power generation capability before the catastrophic destruction of the Naval base and Vasilikos Power Station.
The original Browse feasibility study, notes Wallace, was an offshore study and entailed building 2 x 7.5 million tons per annum LNG processing trains with each train being built upon a hollow concrete block 300 metres long by 121 metres wide and 23 metres deep. These blocks would then have been towed across 1700 miles of open water and sunk onto the top of the Scott reef, which itself is located 400km from the NW Australian coast.
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