A Feasibility Study on Submarine Gas Pipeline Construction from Cyprus to Turkey and Egypt

Natural gas is a clean, environmentally friendly and one of the most efficient sources of energy that has a significantly increasing demand worldwide. It has a very wide range of uses such as fueling the power generators and heating the buildings with very low levels of greenhouse gas emissions. Cyprus has luckily discovered natural gas reserves and is on the verge of extracting it. The volume of these reserves is more than the domestic demand and it enables the country to export it. The aim of this thesis is to estimate whether it is financially feasible to export the natural gas found in Cyprus to two closest potential markets, namely, Turkey and Egypt. To attain a conclusion, the export price of natural gas through a gas pipeline to Turkey and Egypt is calculated separately and then compared with the import prices these countries are currently paying to buy natural gas from neighboring countries. The results under the base case scenario demonstrated that it is feasible to export the natural gas found in Cyprus to both Turkey and Egypt. Also various sensitivity analyses in this thesis showed that the possible profit of Turkey and Egypt is different against the changes in the volume of natural gas to be extracted and the import prices. It is determined that there is a high level of risk in importing the gas through pipeline. Keywords: Natural Gas, Pipeline, Export Price, Cyprus, Turkey, Egypt