EMGC '19: Eni, Total execs tout more exploration and LNG for Eastern Med
NICOSIA—On Day 1 of the Eastern Mediterranean Gas Conference (EMGC 2019), Carlo Vito Russo, Executive Vice President, Europe and Russia for Eni SpA, delivered a keynote speech following a talk by the Minister of Energy, Commerce and Industry for the Republic of Cyprus, H. E. Yiorgos Lakkotrypis.
Following Russo, Yves Grosjean, general manager, Total E&P Cyprus, spoke about Total's energy outlook through 2040 and how the Eastern Mediterranean fits into the company's targets.
Zohr: A continual game-changer. Eni's Mr. Russo discussed the present state of Eastern Mediterranean resource development, and noted that new explorations in 2018 and 2019 have proved the extension of the Zohr play in the Cyprus Exclusive Economic Zone (EEZ).
More exploration is necessary, Russo said. "Only then will be know how much gas can be added to what has been found." By the end of the year, Eni plans to bring online three more trains to increase production at its Zohr field in excess of 3 Bcfd. Twelve wells have been drilled, thus far; eight are in production.
"Zohr changed the energy balance of Egypt, and led Egypt to commit to LNG again," Russo said. The potential for satisfying domestic and export gas supply needs will be assisted by facilities already in place that will help make the gas available to the market.
Russo closed his talk in saying that the discoveries made so far are significant, but that new exploration efforts are vital to exploit Cyprus' entire potential as a service center for the region.
Responsible energy development and LNG incentives. Total E&P's Yves Grosjean next spoke about Cyprus' desire to be "the responsible energy major."
"It's about providing energy solutions to the world that are reliable, affordable, and responsible," Grosjean said. Total is addressing the climate change challenge and will incorporate its emissions reduction goals into its Cyprus development plans.
Worldwide, economic growth will continue to drive energy solutions, Grosjean noted. Under Total's "Momentum" scenario, the company sees an increase in gas use of 1.8%/year through 2040, dominated by power generation and industrial demand. An LNG demand increase of 1%/year is also anticipated.
"What we need is more efforts, however," the general manager asserted. "What we need is a rupture. The "Rupture" scenario under our outlook to 2040 will see a drastic reduction of coal usage and oil consumption, along with significant use of renewables and huge growth in natural gas as the energy of choice for the energy transition."
Under Total's "Rupture" scenario, power demand will double by 2040, requiring a massive switch to renewables and the greater use of carbon capture and storage technology. "These solutions mean focusing on oil projects with low breakeven, as well as on the gas value chain, to provide reliable and affordable resources," Grosjean said.
Big LNG aspirations. The General Manager next discussed Total's plans for LNG. The company predicts that LNG plants in operation or slated for startup around the world will be able to meet market demand between 2020 and 2023, but that more project FIDs will be needed to ensure supply after that time.
Grosjean noted that Total aims to reduce its liquefaction costs to below $2/MMBtu to become more competitive, and to achieve 10% market share in LNG by 2020, thereby becoming the world's second-largest supplier of liquefied gas.
