Cyprus, Egypt to build gas pipeline

Cyprus and Egypt signed a deal in Nicosia Wednesday paving the way for detailed negotiations on a pipeline to export natural gas from Cyprus to its energy-starved neighbor.

"It's one of a series of legal arrangements, which will further support the sale of Cypriot natural gas to buyers in Egypt, provide certainty to investors and complement relevant commercial discussions now underway," a joint statement said.

Natural gas reservoirs have been discovered below the seabed south of Cyprus, with exploitation not expected to start before 2018.

Lucrative business

Cyprus' Energy Minister, Georgios Lakkotrypis, said given the planned start of exploitation, the aim was to get the new pipeline operational sometime between 2020 and 2022.

Nicosia has been eager to secure alternative ways to exploit its offshore reserves after confirmed finds so far were insufficient to make a liquefied natural gas plant on the island's southern coast financially viable. By contrast, Egypt already has the option of turning the raw material into LNG, which can be transported over long distances far better.

Egypt is expected to use the gas imports primarily for domestic consumption, but in part also for re-exporting.

Since its first offshore gas find back in 2011, Cyprus has held a series of exploration licensing rounds, hoping to discover new deposits. In the latest round, US giant ExxonMobil with Qatar Petroleum are among a total of eight major energy players bidding to look for offshore oil and gas.

hg/sri (AFP, dpa)