By Adrienne Blume
NICOSIA, Cyprus -- Gulf Publishing Companys inaugural
Eastern Mediterranean Gas Conference (EMGC) in Nicosia, Cyprus,
concluded Wednesday with Day 2 of the technical presentations.
The conference, which took place from April 810 at the
Hilton Cyprus, featured speakers from top companies operating
in the region, including host sponsor Noble Energy.
Day 2 of EMGCs technical program addressed regional
infrastructure developments in the morning, while the afternoon
focused on resource development in Cyprus and Israel. The
conferences final session examined the future of the
Eastern Mediterranean in light of the resource potential and
infrastructure developments needed. The following includes
highlights from several of the days presentations.
FLNG outlook and development. Victor Alessandrini,
FLNG Business Development Manager for Technips Offshore
Business Unit, spoke about the market and future developments
for floating LNG (FLNG).
demand for LNG could increase by 50% by 2035 from 2012,
according to Mr. Alessandrini (pictured
right); and a myriad of opportunities to meet LNG
demand after 2015 exist. These opportunities include gas
resources from basins in the Middle East, the Atlantic and the
FLNG offers new opportunities for gas producers and is
characterized by several environmental and economic
considerations and benefits, particularly as it is a mobile and
environmentally non-invasive way of processing gas into LNG and
transporting it to various locations. From an economic point of
view, FLNG offers cost optimization in areas with high construction costs, and it can
exploit deeper reserves and reserves located far offshore.
FLNG is also an ideal solution when pipeline construction would be too
complicated or time-consuming. Furthermore, FLNG can be used in
scenarios where insufficient reserves exist for a dedicated
onshore LNG plant, and it enables the monetization of
associated gas instead of flaring or reinjection. According to
Mr. Alessandrini, an increasing number of international oil
companies (IOCs) are examining FLNG to monetize their gas
Some technical challenges of FLNG include incorporating what
is essentially a full LNG plant onto an FPSO; gas processing facilities must be adapted to a
marine environment. Space, weight and stability management are
major considerations when planning an FLNG project, Mr. Alessandrini noted.
Offloading LNG between two vessels at sea is a delicate
process, as is importing large quantities of high-pressure feed
gas. Equipment and piping loads are impacted by sea motion, and
the marine environment (i.e., salt, humidity,
etc.) is another factor that must be taken into account when
designing an FLNG vessel.
Pushing design limits for pipelines. Uri Nooteboom,
President of INTECSEA, spoke about pipeline development through
the ages, starting with a slide showing an illustration of the
first known pipelines in useaqueducts and terracotta
water pipes in ancient Greece.
The first modern
trunkline, which was used in the delivery of brine supply,
dates back to 1595, according to Mr. Nooteboom.
Oil pipelines did not appear until the 1860s, with the
first such line established in Pennsylvania. A present-day
challenge for pipeline design is the installation and use of
large-diameter, deepwater pipelines.
Mr. Nooteboom (pictured
right) outlined several gas pipeline design
principles, noting that deepwater gas lines are more
challenging to build than liquids pipelines due to the design
parameters involved. Pipeline pressure and the distance
required for gas transportation determine the diameter of the
pipeline, while the diameter of the pipeline and the depth of
the water determine the wall thickness of the line. Therefore,
the diameter and wall thickness of the pipeline, plus the water
depth, determine the complexity of the pipeline design.
Mr. Nooteboom acknowledged that the large-diameter,
deepwater pipeline sector is still growing, and that the future
of pipeline design will rely on technology, innovation, engineering
talent and effective contracting strategies.
Terminal storage in Cyprus. Managing Director of VTT
Vasiliko Ltd., George Papanastasiou, highlighted the benefits
of the VTT Vasiliko (VTTV) storage terminal for Cyprus. This
terminal will serve as a hub in the Eastern Mediterranean to
capture flows of fuel oil from the Black Sea to the East;
middle distillate supplies from the East to the West; and
gasoline from Europe to the Eastern Mediterranean
and the Red Sea region.
Mr. Papanastasiou (pictured right), the
rationale for the VTTV terminal project is driven by the need
for new storage facilities, as aging storage
terminals in Lanarca, Cyprus are slated for relocation. The
VTTV project will offer better logistics for local markets and
serve as an option for the storage of Cyprus compulsory
Cyprus also provides a favorable location within the EU and
features deepwater ports close to shore to accommodate
deliveries by large vessels. The VTTV facility is expected to
generate 18 million (MM) per year of revenue for Cyprus
and enable the commercial import and export of products.
Additionally, Mr. Papanastasiou noted that VTTV will boost
foreign investment and commercial development in
Cyprustwo goals that were discussed in a later
presentation by Dr. Symeon Kassianides of Hyperion Systems
Cypriot growth aspirations. In his presentation, Dr.
Symeon Kassianides, Chairman and CEO of Hyperion Systems
Engineering Group, examined Cyprus readiness to address
the challenges and opportunities before it. Dr. Kassianides
noted that both the public and private sectors, including the
government, universities and petroleum organizations, are
preparing the country for an upswing in work opportunities in
the oil and gas sectors. He also confirmed that FEED studies
are being performed for an LNG terminal in Cyprus.
According to Dr. Kassianides, long-term potential projects in Cyprus include a methanol plant, an ethylene facility,
a gas-to-liquids (GTL) plant (if gas reserves are large enough
to warrant GTL production), a fertilizer plant for urea and
ammonia, and steel and aluminum factories.
We strongly believe in Cyprus as an upcoming energy
hub for the future of the Eastern Mediterranean, Dr.
Kassianides said. He added that Hyperion Systems Engineering
Group is both well-poised and determined to play a major role
in the development of the Eastern Meds energy
Israels energy goals. The afternoon session
kicked off with a presentation by Jay Epstein, Business
Development Manager for Israel Natural Gas Lines, on the
infrastructure needed for the development of Israels
natural gas sector.
Mr. Epstein shared details on the governments plans
for increasing the capacity of the gas transmission system,
according to the expected future demand in light of new gas
discoveries. He also spoke about the governments
strategies for bridging the gas supply shortage between the
depletion of present gas reservoirs and the development of
future reservoirs. Ensuring supply security and establishing
500 million cubic meters of additional natural gas storage
capacity are other major goals, Mr. Epstein noted.
Gas as transport fuel. Next, Chairman of Israels
Dor Chemicals Ltd., Gil Dankner, spoke to attendees about the
use of natural gas and its derivatives as alternative fuels for
transportation. According to Mr. Dankner, the main objectives
for doing so are threefold: To overcome the OPEC monopoly on
oil prices; to find a reliable, low-cost and practical
alternative for oil/methanol blending; and to lower emissions to mitigate air
Dor Chemicals was recently granted permission to commence
testing of a fuel blend of 15% methanol and 85% oil, or M15.
The testing, which is being carried out in conjunction with the
Israeli Ministry of Environment and Ministry of
Transportation, has been found to significantly reduce carbon monoxide (CO) emissions from vehicles. Mr. Dankner
said his company is also testing methanol as a low-cost alternative
fuel for emissions reduction in gas
The future of the Eastern Med. During EMGCs
eighth and final session, The Future of the Eastern
Mediterranean, the CEO of Cyprus National Hydrocarbons
Co., Dr. Charles Ellinas, noted that the establishment of the
Vasiliko LNG terminal is vital, as it will enable Cyprus to
access markets in Europe, the Far East, and other
global regions. Dr. Ellinas downplayed the benefits of
pipelines in gas distribution, saying that they do not offer
flexibility in specific markets and are, therefore, subject to
longer-term commercial and political risks.
By 2025, Cyprus could be poised to export 25 million tons
per year (MMtpy) of LNG if the Vasiliko facility grows into an important
regional LNG hub, Dr. Ellinas said. Cyprus LNG exports
could rise to 35 MMtpy in 2035, from a projected 5 MMtpy in
2020, under the governments most optimistic scenario.
Dr. Amit Mor
(pictured right), CEO of Israels Eco
Energy Ltd., next spoke about natural gas developments and
prospects for regional cooperation. Dr. Mor praised Noble
Energys efforts in developing the regions resources
and emphasized the importance of the Tamar field to
Israels gas-fired power sector. He also noted that the
Israeli government plans to protect the Tamar development to
ensure domestic energy security.
Dr. Mor opined that an LNG feeder tanker scheme would be
most appropriate for Cyprus in the near term. These smaller LNG
vessels, which cost between $5 MM and $20 MM, according to Dr.
Mor, are a cheap and easy solution for Cyprus
LNG aspirations. The CEO cautioned Cyprus to move quickly on
this scheme so that near-term opportunities to export LNG are
Concluding EMGCs eighth and final session was Noble
Energy Inc.s Director of Operations for the Eastern
Mediterranean, Terry Gerhart. Mr. Gerhart detailed Noble
Energys development plans for the Tamar and Leviathan
fields, as well as for the Cyprus A development.
Our primary goal is to expedite this project to gas delivery as soon as
possible, Mr. Gerhart said, referring to Cyprus A. He
noted that the assessment and development of the play is
strategically and economically significant for both his company
and for the country of Cyprus. Mr. Gerhart expects the first
well to be drilled at Cyprus A in June 2013. Additionally, an
LNG plant to process the Tamar, Leviathan and Cyprus A gas
could begin operations near the end of the decade and
accommodate up to three trains, Mr. Gerhart said.
Inaugural EMGC a success. Speaker Chris Barton, Senior
Vice President of KBRs Oil & Gas Business
Development, praised the transparency of the conference.
Meanwhile, another executive at Tuesday evenings gala
dinner noted that the professionalism and caliber of speakers
at EMGC far surpassed those of related events held previously
in the region.
During his closing remarks on Wednesday afternoon, Gulf
Publishing Company President and CEO John Royall thanked
attendees for helping make the inaugural Eastern Mediterranean
Gas Conference a success. Mr. Royall said that the
conferences networking, forum-building and
awareness-raising objectives had exceeded original
Major companies such as Noble Energy, Eni,
Total, Woodside Petroleum and others have made significant
investments in the region, Mr. Royall noted. Theres
a lot of noise out there, but my advice to the industry and to
all of you in this room is to look where the experts are
investing their money, he said. And theyre
investing it here, in the Eastern Mediterranean.
Photo 1: Technips Victor Alessandrini discusses the
global outlook for FLNG developments.
Photo 2: INTECSEA President Uri Nooteboom explains proposed
pipeline routes for the Eastern Med.
Photo 3: VTT Vasiliko's George Papanastasiou details plans for
the VTTV storage terminal in Cyprus.
Photo 4: The conference hall was packed during Dr. Amit
Mors late-afternoon presentation.