Cyprus Upbeat on Gas Prospects

Cyprus could use its reserves of gas to meet up to 40% of Europe's additional gas needs over the next decade, lessening the European Union's reliance on Russia, the head of the island's national gas firm said.

Charles Ellinas, executive chairman of the Cyprus National Hydrocarbons Company, said authorities would also push ahead with plans to develop a liquefaction plant to handle exports expected from 2020.

But gas from the region also comes with Middle East complications since the fields are split with Israel and Lebanon, two countries technically at war, and Turkey objects to ethnically split Cyprus tapping offshore reserves.

"I am very confident that Cyprus can provide Europe with 30 to 40 percent of its additional gas needs by 2025," Ellinas said in an interview with agencies.

Europe's gas demand is slightly below 500 million cubic meters a year, and Ellinas estimated the increase in demand by then to be around 100 billion cubic meters a year, although many analysts say demand will grow much more slowly.

The US Geological Survey estimates that a mean 3.5 trillion cubic meters of recoverable gas lie in the eastern Mediterranean basin.

To date an estimated 200 billion cubic meters (bcm) of natural gas worth $80 billion at current prices have been discovered in the Aphrodite gas field in Cypriot waters. However further development would require intensive investment, experts say.  Political considerations, in a sensitive region, might also prove a brake.