WHAT WE BELIEVE
REGIONAL CHALLENGES AND OPPORTUNITIES REQUIRE REGIONAL SOLUTIONS
The Opportunity is Significant and Will Get Greater
We believe that the region should emerge as the next global hub for the liquefaction and export of natural gas.
The Eastern Mediterranean holds an abundance of hydrocarbon resources. The potential to find significant new gas reserves through drilling programmes and exploration licensing rounds will grow.
However, despite the abundance of gas found to date, commercialising the assets and fully monetising them remains a challenge.
Aphrodite in Cyprus has remained a stranded field since its discovery in 2011. Leviathan in Israel has contracted less than 3 TCF (roughly 500 BCF per day) of the 21 TCF reservoir to regional markets.
We believe that to transform the region into an alternative energy source for markets around the world, there is a need for major investment in liquefaction facilities and pipeline infrastructure in the region. Without this, the hopes of the region to become an energy hub may be lost.
Successful Commercialisation of the Gas Requires a Stable and Diverse Customer Base
The surplus of gas resources can only be fully monetised through export optionality via a long-term LNG and pipeline strategy. This strategy must be achieved in full collaboration amongst the Eastern Mediterranean countries.
To maximise the likelihood of success in exporting regional gas at viable prices to end markets, the region needs to align with global market demand.
We believe that to be competitively priced and ready to address global market demands, the Eastern Mediterranean needs to have a dedicated independent operator with a strong regional development focus. This will allow long term buyers (“off-takers”) to have confidence in considering Eastern Mediterranean gas as part of their gas acquisition plans.
Cynergy remains open to the opportunity of being involved in the financing and development of pipeline projects to further serve regional and further/EU demand.
“The current wave of LNG export projects will increase liquefaction capacity by 30% by 2023. This will be led by an increase in output from the United States, which accounts for nearly three-quarters of the growth in total global LNG exports in the period, followed by Australia and Russia. However, a lack of new LNG projects after 2020 could lead to a tightening of LNG markets. Given the long-lead time of such projects, investment decisions will need to be taken in the next few years to ensure adequate LNG supply beyond 2023”. – International Energy Agency 2018
“Imports of LNG set a new record in 2018 with a robust 8.5% growth. The rate of growth will slow from 2019 and further in 2020, before picking up again in 2021. While Asia will play a more dominant role in driving LNG demand, long-term demand growth in Europe will be challenged by competition from renewables and batteries.” – Bloomberg New Energy Finance 2018
The Opportunity Requires Significant Infrastructure Development
The region’s nascent energy sector faces challenges which are nearly impossible to overcome. Chief amongst these is the scale of infrastructure that needs to be financed and developed for successful monetisation of such reserves. This is our focus.
A Regional Problem Requires a Regional Solution
The Eastern Mediterranean gas resources can yield significant strategic value when the interests of all relevant parties are considered under a regionally aligned strategy. This requires a sensitive approach to acquisition negotiations and project development.
We believe in the power of win-win solutions which will allow the region to connect its world-class resources with diverse global buyers. Cynergy’s regional strategy will prove key in overcoming the region’s complex geological and geopolitical landscape, while assuring cross-border trade and collaboration.
“From my experience, such challenges are best addressed by consolidation and collaboration – the approach Cynergy is leading in the region. Cynergy brings the necessary focus to the region at a critical time and this is how you address complex project development.
The region’s existing natural gas infrastructure assets lack the capacity and capabilities to facilitate large-scale energy distribution and export. The region requires significant capital-intensive energy infrastructure that will be critical for the full commercialisation of its natural gas reserves.
Given the magnitude of capital expenditure and project financing needs – the region cannot be overly reliant on any one single customer within the region. Optionality will secure financing needed”. – Lou Montilla
The Eastern Mediterranean Requires its Own Focus, Effort and Attention
Cynergy’s focus is solely on the Eastern Mediterranean energy assets and the infrastructure needs that will best serve the region’s monetisation plans.
Our tailored approach allows us to focus on developing assets that other operators would likely delay or decline because of competing portfolio considerations.
Long-Term Commitment to the Region – No Matter the Complexities
The complexities in the region require a sensitive stakeholder management approach and a long-term financial commitment to the region which is hard to find amongst super-major operators or in energy focused private equity funds.
Cynergy has the approach necessary to see long term ambitious and intricate projects through to their fruition.
Cynergy is committed to bolstering the Eastern Mediterranean’s energy security through strategic investments in offshore upstream and midstream infrastructure development, as well as investment in downstream industries across the region.
Cynergy’s founders have already spent considerable time, effort and capital to enable the development of its strategy and ecosystem in the most regionally-aligned manner.
Cynergy’s stakeholders are fully committed to the region, to its development into a globally important energy hub and to the long-term prosperity and stability of the people and countries of the Eastern Mediterranean.
“We are different. We are entrepreneurial and solely focused on developing the East Med assets. Our approach is guided by extensive planning and careful thinking. We are not burdened by other considerations that could otherwise preclude major operators or private equity firms from successfully implementing an Eastern Mediterranean focused strategy.” – Mike Germanos
“We are of the region, in the region, for the region. We are led by an entrepreneurial founder with full commitment to leading Cynergy’s ambitious plan to consolidate and develop key energy assets in a regionally sensitive and collaborative way. “- Panicos Euripides
Cynergy is Committed to Sustainable Growth while Protecting the Environment
We are based here, we are an Eastern Mediterranean group, which is why we are committed to protecting our communities, the environment and the safety of the offshore platforms. We will be responsible for protecting and empowering the communities in which we operate.
We have a responsibility for creating local jobs and expertise which we see as fundamental to our aspiration to bring sustainable long-term growth to the region.
The Eastern Mediterranean has its Advantages…
We will leverage the already existing LNG export terminals in the region as part of our wider strategy. We will pursue win-win deal structures between Cynergy and the operators of the region’s assets.
We are keen to examine how such assets can be utilised for getting LNG to the global markets within an expedited timeframe.
However current LNG capacity is not sufficient for the full monetisation of the gas reserves found. Our strategy includes a plan for a new LNG infrastructure in Cyprus so that over the next five to seven years, the region will have the infrastructure needed to fully monetise current and future regional gas finds.
Cynergy’s Involvement in Developing the Region’s Resources Serves Local Interest
In Israel, Tamar has been developed for the local market and Leviathan is expected to deliver gas this year. In Egypt, Zohr’s development is a real success story. In Cyprus we are seeing increasing exploration programmes yielding new gas finds.
Public companies involved across the region can be challenged by internal portfolio considerations as well as stakeholder and financing concerns that preclude their Eastern Mediterranean discoveries from being prioritised for development. Geopolitical and political risks across the region further increase the complexity for current operators.
“As a new entrant, Cynergy could help provide capital, expertise and focus within a timeframe and way of working that would see development of the Eastern Mediterranean gas resources expedited and empowered in a regionally aligned way.” – Mike Germanos
The Cynergy Difference
Our approach will catalyse the full development and monetisation of Eastern Mediterranean gas resources through the effective deployment of capital needed for infrastructure development in the region.
“Where Cynergy makes the difference is in having a strong stakeholder base, a dedicated board and team solely focused on driving the success of the East Med through focus, capital and experience.
We strongly believe that Cynergy’s approach represents an opportunity for current operators and regional stakeholders to collaborate. Current operators can increase their own success by partnering and coming to structured transactions with Cynergy”. – Lou Montilla