The Investor’s Guide To Cyprus
THE SHIPPING ISSUE
You Decide On The Investment
We'll Provide The Rest
www.CyprusStandards.com The Cyprus Top 10:
Accountants Lawyers Developers Banks Advertising Marketing Consultants
Shipping Importers Exporters Construction Insurance Estate Agents IT Solutions
NAMES YOU CAN TRUST Along with a complete Traveler's Guide and:
Airlines ∩ Travel Agents ∩ Car Rentals Luxury Hotels ∩ Apts & Villas ∩ Activities
Сделайте Кипр Вашим Местом Назначения, А Мы Обеспечим Остальное
Кипрские тор-10:
Авиакомпания Туристические агенства Апартаменты и Виллы Достопримечательности Медицинские клиники Красота и здоровье Поля для гольфа
Люкс отели Аренда машин Рестораны Шоппинг Спа Бары Клубы
КОМПАНИИ, КОТОРЫМ ВЫ МОЖЕТЕ ДОВЕРЯТЬ! Наряду с инвестиционными возможностями руководство по:
Гольф-недвижимость ∩ Бухгалтеры и Адвокаты Судоходство и Логистика ∩ Виллы с видом на море
4 CyprusStandards.com
5 CyprusStandards.com
Cyprus is at the forefront of global shipping with a fully functional and innovative department of merchant shipping, an EU approved tonnage tax regime and a committed resident shipping industry. At KPMG Cyprus, our dedicated team of shipping professionals provide support to our clients by drawing on a depth of shipping knowledge and experience, offering tailored solutions to the challenges they face. Our highly qualified practitioners undergo continuous industry specific training so as to remain at the forefront of developments within the shipping industry and, together with our global network of shipping specialists, apply this expertise to the services we offer to the maritime sector, which include: • Audit and assurance related services •
International and local tax planning, structuring and restructuring
• Tonnage tax compliance services • Advisory services (corporate finance, valuations, mergers and acquisitions, restructurings) • ISAE 3402 service reports on ship managers for communicating information to ship owners on the former’s internal controls For more information please contact: Sylvia A. Loizides Board Member, Head of Shipping T: 25 869 138, F: 25 363 842 E: sloizides@kpmg.com Alexandros S. Sofocleous Board Member T: 25 869 223, F: 25 363 842 E: asofocleous@kpmg.com
kpmg.com.cy
©2014 KPMG Limited, a Cyprus limited liability company and member of the KPMG network of independent member firms affiliated with KPMG International Cooperative (”KPMG International”), a Swiss entity. All rights reserved.
We understand shipping
22 CyprusStandards.com
Cypriot flagged vessels Vessels with Cyprus flag* (708) - colours show country of ownership, size shows relative value ($M). Ownership Country
Flags of Cypriot owned vessels by total value ($M)
$5,000
$1,600
$4,500 $4,000 $3,500 $3,000
$1,400 Shown in USD million
Shown in USD million
Country of ownership of Cypriot flagged vessels by total value ($M)
$2,500 $2,000
$1,500 $1,000 $500 $0
$1,200 $1,000 $800 $600 $400 $200 $0
Most valuable Cypriot flagged vessel*
The
Grand Aniva
The Grand Aniva, a Large LNG, owned by Sovcomflot, 147 200 CBM, built in 2008 by Mitsubishi.
= $132million
All figures shown in $million for coverage of the tanker, bulker (>20k dwt), container and gas fleet.
For more information regarding our service please contact: info@vesselsvalue.com +44 (0) 8995 4364
* *as of 25/09/2014
Ships cons ume fuel when they s tay at the port. This creates pollution, nois e and vibration in the port area. The s olution to this problem is s hore-to-s hip power. It allows direct connenction of s hips to a harbor’s electric grid.
So ur c e s: www. abb. c o m Glo bal st at ist ic s: Wo r ld f le e t st at ist ic s www. shipbuildinghist o r y. c o m ; po r t s wo r ldwide www. wo r ldpo r t so ur c e. c o m , Glo bal e m issio ns: C O 2 www. m dgs. un. o r g, Shipping f le e t e m issio ns 4% ( www. abb. c o m / po r t s) . Em issio ns f r o m ships at po r t s ar e 7% o f t he t o t al “Fast t ur nar o und ships and t he ir im pac t o n c r e w, ” E. Kahve c i 1998 C o al-f ir e d plant s e m issio ns: Gr e e n Po we r Equivale nc y C alc ulat o r Me t ho do lo gie s www. e pa. go v
large land areas which will remain committed for a long term resulting in the loss of residential or tourist development. Part Two Floating Liquefaction Of Natural Gas Unit The discovery of new gas fields offshore, at very large distances from the mainland and isolated, led to the inspiration of floating liquefaction of natural gas since it would be economically prohibitive to develop and unprofitable to exploit in distant onshore terminals. Such Liquefaction method is ideal for remote, isolated and individual deposits under three trillion cubic feet. What is a floating natural gas liquefaction unit A floating natural gas liquefaction unit is ideal for liquefaction of natural gas in deep seas near the deposits which are under exploitation at a floating platform where the gas goes. The extracted natural gas from the near by wells is gathered through pipelines on the platform were it is processed for purification, liquefaction and storage and from there it is taken for export to other countries by special tankers. The world’s first floating liquefaction unit ‘Prelude’ is now under construction, owned by Royal Dutch Shell. The decision for the attempt was taken in 2009 and construction began in 2011. Prelude FLNG is expected to be completed and operational in 2017 at the Australian Browse Basin located 185 km from the shore and at water depth of 250 meters. Features: Length 488 meters Width of 74 meters Annual Processing Capacity: 3 mtpa LNG NG 1,3 mtpa natural gas condensate 0,4 mtpa LPG. Analysts estimate that it will cost close to $ 13 billion U.S. dollars. Under construction are now three more floating LNG units intended to operate in Malaysia, Indonesia and in Mozambique. Country
Gas Field
Main Owner
Production Capacity
Estimated Year of Operation
Cost Forecast
Australia
Browse Basin
Royal Dutch Shell
3 MTPA
2017
$13 Billion
Malaysia
Rotan field
Petronas
1.5 MTPA
2018
$19.6 Billion
Indonesia
Abadi field
Inpex - Shell
2.5 MTPA
2018 will be assigned
?
Mozambique
Mamba discovery
Eni
2.4 MTPA
2019
?
Advantages of Floating Natural Gas Liquefaction Units •Exemption of capital investment for construction of gas pipelines to transfer natural gas to onshore liquefaction terminal and construction of infrastructure to export natural gas (jetty) by tankers. •Provides the ability to exploit remote and isolated deposits which would not be possible to develop otherwise. •Less noise and nuisance from land units. Disadvantages of Floating Natural Gas Liquefaction Units •Reduced annual production due to low capacity •Reduced staffing and work positions
Benchmark of onshore and floating natural gas liquefaction units
Onshore Liquefaction terminal
Floating Liquefaction Unit
Ability to create synergies and partnerships or joined operations with neighbor countries
✓
✖
Security of facilities
✓
✖
Ensure investment
✓
✖
Project delivery time
✓
✖
Upgrading ability
✓
✖
Reliability
✓
✖
Ability to convert Cyprus into a regional energy hub
✓
✖
Jobs creation for Cypriots
✓
✖
Required land for facilities
✖
✓
Attractiveness to comparable investments
✓
✖
Conclusion The floating liquefaction unit is a technology that offers the opportunity to exploit natural gas in isolated and remote areas with small but many deposits which would not be feasible to exploit due to cost and technical difficulties. The addition of this sector in the natural gas industry will contribute significantly to the increase of recoverable reserves worldwide. In the case of Cyprus, however, a floating liquefaction unit as the main means of liquefaction of natural gas reserves or as an additional means to the onshore liquefaction terminal would be costly, dangerous and experimental as it fails to secure the objectives, parameters and collaborations needed and offer Cyprus the means to the successful and profitable exploitation of its natural wealth. References Candei Luca et al (2013) ‘FLNG- Floating Liquefied Natural Gas: An evolutionary way to unlock stranded and marginal gas fields’ NTNU Norwegian University of Science and Technology. Nexant (March 2009) ‘Floating LNG Production’ Chemsystems PERP 07/08S10 Legislative Assembly Parliament of Western Australia (May 2014) ‘Economic Impact of Floating LNG on Western Australia’ Economic and Industry Standing Committee. Pressprojectsogp (February 2014) ‘The trend towards developing floating LNG to fuel the future of the oil and gas industry’. Enoch, N., (December 2013) ‘What’s 1,601ft long and weighs 600,000 tonnes… but floats? World’s largest ‘ship’, which is bigger than the Empire State Building, takes to the water for first time’ Mail Online. Thalassetis F., (2013α) ‘Pipeline or Liquefaction the Next Steps’ accessible at: www. cyprus-hydrocarbons-frixos.com Thalassetis F., (2013β) ‘Cyprus Liquefaction Terminal, Infrastructure Safety and Additional Choices’ accessible at: www.cyprus-hydrocarbons-frixos.com Frixos has a BA in Business Administration, an MA in Management and an MBA in Oil & Gas Management. Since completing his studies, Frixos has been elaborating in research and writing of studies on issues relating to the management of Cyprus hydrocarbons.