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Cyprus Department of Merchant Shipping acting director Ioannis Efstratiou sets out the east Mediterranean island nation’s LNG-development priorities
The LNG market is firmly embedded within the new shipping strategy that Cyprus’ minister of transport, communications and works recently announced, that aims to consolidate and develop Cyprus’ role in world shipping.
Following the discovery of several sizeable natural gas fields in the eastern Mediterranean in recent years, the opportunity for Cyprus to become an energy hub and leading regional transporter of natural gas continues to flourish.
As international regulations on emissions become increasingly stringent and widespread, we expect demand for LNG, as one of the most environmentally friendly means of energy, to continue to grow.
Cyprus is committed to playing a central role supporting regional development of LNG in the Mediterranean. The expansion of the LNG market within the Cyprus exclusive economic zone (EEZ) has moved apace and, although still in the early stages, has already generated interest from oil majors including ENI, Total, Noble Energy Statoil, Exxon Mobil, Qatar Petroleum, and Cairn.
Occupying some 51,000km2 offshore, the Cyprus EEZ encompasses the Eratosthenes seamount, the Levant Basin, and the Nile Delta, home to some of the biggest natural gas discoveries of the last decade.
Following bilateral agreements with Egypt, Lebanon and Israel, the exploration area was divided into 13 blocks, which are in various stages of discussion and development with interested parties.
And so Cyprus has the potential to develop into an important natural gas energy centre for the Mediterranean. To support the EEZ, we have also focused on providing additional services including transport ashore, operating specialised ships and equipment, and supplying specialised support services. This has already begun to drive interest from companies involved in port infrastructure.
Cyprus is also positioning itself to tap growth in LNG shipping. Globally, the LNG market is in its relative infancy. But the international fleet of gas carriers continues to grow.
We have six LNG carriers in the Cyprus-flag fleet of a total 401,548gt. We also expect two newbuildings to enter the fleet in the new year, and to double the number of gas carriers, in line with development of LNG in the Cyprus EEZ.
That fleet growth will largely be driven by development of the LNG market in the eastern Mediterranean, as discussions progress, and by international growth as the market matures for LNG as marine fuel.
With a strong focus on the development of the LNG market and related infrastructure and services, we expect the gas carrier fleet to become one of our biggest growth areas.
Other incentives such as our comprehensive Tonnage Tax System (TTS) – Cyprus is the only open registry in Europe that offers a tonnage-tax system approved by the European Commission – create the foundation for sustained growth and expansion into new markets.
All of this will ensure that Cyprus remains an attractive, professional and leading registry in the global shipping market.
Already an important shipping hub in Europe, Cyprus’ new shipping strategy for Cyprus lays out a strong approach, building on our reputation as a major centre for third-party ship management and related services by capitalising on growth areas such as LNG.