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Gas producer Energean ( EERGF ) signs letter of intent

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CEO says gas could flow within 12 months

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Pipeline capacity of 1 billion cubic metres a year

By Sarah El Safty

ABU DHABI, Nov 4 (Reuters) - A $400 million pipeline to

transport natural gas from Israel to Cyprus is awaiting

government approval from both countries and Israel has expressed

support, the head of Eastern Mediterranean focused gas producer

Energean ( EERGF ) told Reuters on Tuesday.

Energean ( EERGF ) on Monday signed a letter of intent with leading

Cypriot industrial and energy group Cyfield for the potential

supply of natural gas from Israel to Cyfield's planned power

plant via the new pipeline, said Mathios Rigas, CEO of the

British firm.

Gas could flow through the pipeline within 12 months of the

government approvals being granted, said Rigas, speaking in an

interview on the sidelines of the ADIPEC energy conference in

Abu Dhabi. Energean ( EERGF ) is awaiting a response from the Cypriot

government, he added.

1 BILLION CUBIC METRES CAPACITY

"The pipeline would have the capacity of 1 billion cubic

metres a year, enough to bring all the gas the Cyfield project

needs, but also to give more to the island if others need to use

the gas," Rigas said.

The project, which would cost $400 million, could be fully

funded by Energean ( EERGF ), but partners may also be brought in the

future, Rigas said.

Energean ( EERGF ) is also waiting government approvals for another

gas supply deal, from Israel to Egypt via the planned Nitzana

pipeline, which Israel has not yet approved.

The pipeline would ease an energy crisis in Egypt, which has

spent billions of dollars on importing liquefied natural gas and

is part of a concerted effort to boost Israeli gas exports to

the Arab world's most populous nation.

The company in October signed a 15-year transmission

agreement as part of $4 billion worth of Israeli gas offtake

contracts.

EGYPT-ISRAEL GAS SUPPLY DEAL SUBJECT TO GOVERNMENTS

Commenting on delay of the deal, Rigas said the issue was

between the governments of the two countries and not between the

business partners.

"It is between the Israeli and Egyptian governments to

decide what can happen," he said.

Israel's Energy Minister Eli Cohen has said he was holding

up the approval for the $35 billion gas deal to secure better

commercial terms for the Israeli market, Israeli media reported

last week.

Rigas said that he still has confidence that obstacles could

be removed.

"I believe that the obstacles will be removed because it

makes sense for infrastructure to be placed to allow gas to be

transported in the East Mediterranean," Rigas said.

"I paid $47 million already. If I didn't have confidence,

it would not be a very wise decision," he added.