Natural Gas Monetization Approaches: The Case of Cyprus

Natural gas is a highly efficient energy source that tends to increase demand worldwide. One of the most important reasons for this is that it is a clean and environmentally friendly energy source. In addition, ng, which has a wide usage area for transformation sector, such as electricity generation to heating and it has very low greenhouse gas emission. Natural gas in the exclusive economic zone of Cyprus will be ready for production in the coming years. The fact that the amount of natural gas found is above the needs of the island is an important opportunity to export it for the prosperity of the whole country. This shows that the export revenues of the whole island will certainly rise and current account deficits decline. The objective of this thesis is to decide the export routes to be followed by Cyprus in order to monetize the gas reserves and to determine the most cost-effective export option. To achieve the result, liquefied natural gas (LNG) and pipeline methods, which are the two most important natural gas export options were chosen. Firstly, the cost required to establish a LNG facility was calculated, but it was estimated that it is financially not viable. Later, the pipeline export option was handled and two different routes were envisaged. Briefly these routes are Cyprus-Turkey and Cyprus-Europe. Finally, it has been decided that the most finacially feasible option in terms of cost of capital expenditures is to divert the pipes to Turkey. Keywords: Natural Gas, LNG, Pipeline routes, Cyprus, Turkey, Europe.