DEPUTY minister visit VTTV

VTTV €150 million projects boost for shipping

VTT Vasiliko, the Dutch-controlled international energy trader playing a key role in developing the Vasiliko energy hub since 2014, has two more storage projects in the pipeline worth about €150 mln.

The new projects will also boost the Cyprus maritime sector to benefit from increased cargo traffic, as well as services provided by local companies.

Deputy Shipping Minister Vassilis Demetriades visited the VTTV premises where he reviewed first-hand the ship-to-shore fuelling facilities and was also briefed about the upcoming projects.

“The facilities and services provided at the liquid fuel storage terminal at Vasiliko are of the highest standard. What is more impressive is the ultra-modern jetty for the loading and unloading of tankers, as well as the unique ship-to-ship fuel transfer,” Demetriades said.

The junior minister said the synergies of the energy and maritime sectors are evident at Vasiliko, offering great potential to the Cyprus economy.

VTTV’s CEO, George Papanastasiou, said the terminal was the biggest foreign direct investment in energy infrastructure that has a direct impact on shipping.

It was delivered in November 2014 by J&P for €300 mln. The company employs 66 people, up from 25 when it started.

VTTV owns the state-of-the-art jetty in the Vasiliko port, at proximity to the country’s power plants.

It can be adapted for the upcoming FSRU terminal that will provide natural gas for consumption by the local energy producers, primarily the Electricity Authority of Cyprus.

The project, a subsidiary of international oil storage terminal operator VTTI B.V., 50% of which is owned by Dutch Vitol, features 28 tanks with a total storage capacity of 545,000 cubic metres of core fuel (diesel, gasoline and jet fuel) a deep-water marine jetty as well as road tanker loading facilities in phase one.

“The terminal, in conjunction with the island’s strategic location near the Suez Canal, places Cyprus on the map of these fuel transports,” Papanastasiou said.

Papanastasiou told the Financial Mirror that the two projects underway are a small private LNG terminal that is earmarked to cost €15-20 mln, able to serve the local market and also exports to nearby markets, such as Lebanon.

The second is a larger project that is expected to cost some €120-130 mln and will store the Euro-spec output of a major regional refiner for supply to the European markets.

He said VTTV storage is at near-capacity and could not offer its service to oil majors when the price of US crude turned negative in April when the price of the benchmark West Texas Intermediate (WTI) fell as low as minus $37 a barrel.

VTTV is also part of the H4E Gasfuel consortium for the design and construction of a floating storage regasification unit (FSRU) in Cyprus.

The consortium includes Norway’s Hoegh LNG, which has submitted a proposal for the installation of an FSRU in Cyprus by next year.

The consortium aims to provide liquefied natural gas to Cyprus as soon as possible, which will reduce electricity costs for local consumers as well as gas emissions and gas emissions taxes.

With its proposal, Hoegh LNG “offers Cyprus the installation, within the first quarter 2021, of an FSRU at Vasiliko and a pipeline to transport the gas to the EAC’s power plant and potentially other users.”

It said the proposal “does not in any way interfere with the government’s plans, while the Cyprus government will be able to save over €100 mln per year from 2021 onwards, by switching power generation to burning natural gas from heavy fuel oil.”

Cyprus can also achieve lower emissions from power generation, resulting in lower cost while the economy will benefit significantly from lower electricity production cost, said Hoegh LNG in a recent statement.

Source: Financial Mirror

Larnaca fuel tanks demolition will go ahead in 2021

Good news for Larnaca as residents long-standing demand for the demolition of fuel and gas storage tanks on the town’s coast is expected to be realised in a year.

Fuel and gas industry stakeholders participated in a meeting at the Presidential Palace with President Nicos Anastasiades on Friday, during which they committed to complete work for the transfer of their oil tanks to the fuel terminals at Vasiliko.

At the meeting, EKO and Petrolina representatives said that they have either submitted or will soon submit applications for permits to demolish their Larnaca installations.

Demolishing the oil storage tanks in the town has been a long-standing issue that has plagued Larnaca’s development for decades.

The demolition process is expected to be completed sometime in the summer of 2021.

Port Authority representatives confirmed that the necessary studies for the transfer of the gas facilities with final decisions taken at the end of the year.

In the meantime, companies will continue on the necessary infrastructure at Vasiliko with work on the gas facilities expected to take longer as significant modifications are needed at the terminal.

President Anastasiades is to meet Larnaca Mayor Andreas Vyras and the municipal council on Monday when he is to inform them on what the fuel companies have agreed.

Residents have voiced concern about the delays in removing a very visible eye-sore on prime coastal land.

chevron to buy Noble energy

Chevron’s deal to buy Noble Energy may affect “Aphrodite” gas field development

The acquisition of Noble Energy by Chevron is a development that may affect the development of the “Aphrodite” deposit, the Ministry of Energy said in a statement issued here on Monday.

In relation to yesterday`s announcement by Chevron for the acquisition of Noble Energy, a member of the consortium of companies holding an Operating Licence for the Aphrodite deposit in the Exclusive Economic Zone of the Republic of Cyprus, the Ministry of Energy, Commerce and Industry stresses that this, of course, constitutes a development that may affect the development of the deposit.

Therefore, it is noted,  the Minister of Energy Natasa Pilides, will have, in the next few days, teleconferences with the heads of both Chevron and Noble Energy in order to receive full information on the agreement reached between them, in particular those concerning the development of “Aphrodite”, which will be evaluated by the Ministry.

lng terminal cyprus

Cyprus gives go-ahead for first LNG terminal

Cyprus’ Natural Gas Infrastructure Company (ETYFA) has issued notice to proceed with the international consortium awarded the contract to build an LNG Import Terminal, the island’s largest energy project.

According to ETYFA’s statement, by accepting the notice, “the parties of the Consortium declare their commitment and their ability to deliver the natural gas infrastructure for electricity purposes within the specified schedule”.

The total project budget is €290 mln. Part of this capital expenditure will be covered by the European Union, in the form of a €101 mln grant through the “Connecting Europe Facility”.

Another €43 mln was provided as equity capital by the Cyprus Electricity Authority, while the remaining amount will be financed by borrowing on favourable terms.

“Co-financing the construction of the project, and creating government-owned facilities, is the optimal choice for the Republic of Cyprus,” said ETYFA.

“It creates fundamental conditions for reducing the price of electricity offering increased benefits to the Cypriot economy and the consumer,” it added.

In December, Cyprus signed a landmark deal with a Chinese-led consortium to build a terminal for the import of LNG for electricity generation.

China-led consortium

ETYFA signed a contract to build its first LNG terminal with the multinational consortium led by China Petroleum Pipeline Engineering.

The consortium also includes METRON (Greece), Hudong-Zhonghua Shipbuilding (China) and Wilhelmsen Ship Management (Norway).

State Natural Gas Public Company DEFA has launched an additional tender for the LNG supply, attracting expression of interest from 25 suppliers.

Cyprus intends to import approximately 0.5 bcm of LNG through Gas Sale Purchase Agreements (GSPAs) with a duration of three to four years, maintaining the option to purchase LNG also from SPOT markets.

Turning to natural gas will help Cyprus safeguard energy supply, diversify the energy mix, and promote competition in the electricity market through the involvement of independent producers.

Cyprus had three unsuccessful attempts to import natural gas in the past due to its small size and energy needs.

The use of natural gas will reduce Cyprus’ carbon footprint by 25% to 30% in replacing oil-burning for electricity generation.

Based on conservative estimates, electricity generation cost savings will range between 15% to 25% from 2022-2025.

Greek oil and gas producer Energean has made a pitch to sell its Israeli natural gas to Cyprus via pipeline at a “competitive price” while Nicosia is opting for LNG.

It has offered to build a $350 mln pipeline to Cyprus — using its own money — to supply gas from its Karish North field to the island.

So far, Cyprus has said it does not need the pipeline as it plans to install a floating LNG import terminal.

It is also set to award a long-term supply contract for LNG — in effect creating a single-supply market.

Norway’s Hoegh LNG has officially applied to Nicosia for a liquefied natural gas infrastructure ownership, operations, and development license in Cyprus.

Hoegh LNG said it was offering Cyprus the stop-gap installation, within the first quarter of 2021, of an FSRU at Vasiliko and a pipeline to transport the gas to the EAC’s power plant and potentially other users.

“This solution can serve as interim until the state-owned LNG infrastructure is in place at Vasiliko.”

The company said its proposal “does not in any way interfere with the government’s plans”.

It said Cyprus, “will be able to save in excess of €100 mln per year from 2021 onwards, by switching power generation to burning natural gas from heavy fuel oil”.

It clarified that the proposal “requires no state aid or investment” and Hoegh LNG is “open to working closely with DEFA, for delivering this important infrastructure project for Cyprus”.

Cyprus is pushing forward to diversify its energy mix to reach new emission targets for the country’s power production.

The country plans to replace the consumption of refined oil products with cleaner solutions such as LNG.

Hoegh says the plan for LNG imports into Cyprus consists of using one of its floating storage and regasification units as a fast track solution for the required fuel switching.

The FSRU can stay on location as a bridging solution or for an extended period serving different customers on Cyprus as well as bulk breaking and delivering LNG to other customers in the Mediterranean.

Source: Financial Mirror

lng vessel cyprus

Eight bids for engineering supervision contract for LNG terminal

Eight bids have been received for the engineering supervision contract for building a Liquefied Natural Gas (LNG) terminal on the island to import the gas for energy generation.

The application process closed on May 21, the state Natural Gas Infrastructure Company (Etyfa) said.

It would immediately proceed with assessing the bids.

Tenders were received from the following companies or consortia: MITAS Generators, Kelberry Joint Venture (MKJV), MT Milan Tractor S.P.A; Abamba Ltd (Epcm Consultants SA), Global Maritime Consultancy & iX Engineers;  Lloyd’s Register, Sofregaz, Rogan Associates (joint venture); Hill International N.V., Bureau Veritas Solutions Marine & Offshore; Rina Consulting S.p.A.;Technip E&C Ltd (Tecl); DNV GL; Amec Foster Wheeler Iberia SLU.

“The interest in the tender process for the supervision of the construction of infrastructure for introducing LNG to Cyprus, as well as the great interest expressed for this important energy project… highlights both the high standard of the project as well as the participants’ confidence in the procedures,” commented Etyfa head Symeon Kassianides.

The LNG terminal will include a floating storage and regasification unit (Fsru) a jetty for mooring the Fsru, a jetty-borne gas pipeline and related infrastructure.

The project is co-financed by the EU under the Connecting Europe Facility.

In December 2019, Cyprus signed a deal with a Chinese-led consortium to build a terminal for the import of LNG for electricity generation.

Source: Cyprus Mail

eni total drilling

ENI and Total drillings officially on hold for one year

Energy companies ENI and Total have notified the government they are postponing their scheduled gas drilling operations off Cyprus for approximately one year.

Government spokesman Kyriacos Koushios confirmed to the Cyprus Mail that they recently received word of the delay from the two companies.

Drilling will be postponed until March or April 2021.

The ‘good news’, Koushios added, is that the companies are not canceling the capital expenditures allocated to the drills.

ENI and Total had planned to carry out exploratory drilling at a site dubbed Kronos in block 6 of Cyprus’ exclusive economic zone.

Prior to the coronavirus outbreak, work had been due to start in early February, but was delayed owing to technical issues faced by the drillship, the Tungsten Explorer, while it was operating in Egyptian waters. The drillship then headed to Lebanese waters.

In mid-April, ExxonMobil had likewise informed the government they would be postponing a planned drill in their block 10 concession.

ExxonMobil said they pushed back to September 2021 an appraisal (or follow-up) well at the Glafcos site in block 10.

The Glafcos reservoir, bearing an estimated 5 to 8 trillion cubic feet of gas, is the largest gas discovery to date off Cyprus. The appraisal drilling there – initially scheduled for this summer – would have helped the company with its commercialisation decision.

Source: Cyprus Mail

Deal to develop LNG infrastructure and supply in Cyprus reached

An agreement to sign a contract on developing the necessary infrastructure and the supply of liquified natural gas (LNG) in Cyprus has been finalised.

The goal is to be able to use LNG in the market for electricity purposes by the end of 2021.

The deal follows lengthy negotiations between the Natural Gas Infrastructure Company (Etyfa), the Natural Gas Public Company (Defa) and the joint venture JV China Petroleum Pipeline Engineering Co Ltd and Metron SA, which will carry out the project.

The government gave the go-ahead to finalise the deal on November 22 during a meeting at the Presidential Palace in which President Anastasiades made it clear that Defa must go ahead with the procedures for the provision of natural gas in Cyprus.

The final process of examining and signing the complex agreement will take place this week.

The joint venture will also include Hudong-Zhonghua Shipbuilding Co. Ltd and Wilhelmsen Ship Management Limited, vital for the conversion and transport at sea of the gas and will be based in the Vasilikos facilities in Larnaca.

LNG tanker carrier Galea, which will operate from 2021 to 2046, will be used as the Floating Storage Regasification Unit (FSRU).

The total cost for the installation and the deployment of the floating unit is estimated at around €260 million, of which €101 million will be covered by European Union funds.

Source: Cyprus Mail

FPSO Cyprus

Intense international interest in Cyprus’ energy market

The first stage of Cyprus’ Gas Company’s (DEFA’s) tendering process for the supply of liquefied natural gas (LNG) has seen considerable interest from the international markets, the body said.

According to DEFA, 25 suppliers, among the most dominant in the global LNG market, are seeking to supply gas and have submitted the prerequisites to qualify for the next stages of bidding and negotiation.
“The intense market competition for LNG supplies confirms that the strategy to acquire an FSRU [Floating Storage Regasification Unit] is the right direction” an announcement said.

Bidders / suppliers claiming their participation in the next stages of bidding and negotiating are; Gunvor International B.V. Amsterdam, Naturgy LNG Marketing Limited, Centrica LNG Company Limited, Endesa Energia S.A., Cheniere Marketing International LLP, Equinor ASA, Novatek Gas & Power Asia Pte Ltd, Shell International Trading Middle East Ltd, Enel Global Trading, Eni Trading & Shipping S.p.A., Total Gas & Power Asia Private Ltd, Osaka Gas Kabushiki Gaisha, Powerglobe LLC, Repsol LNG Holding S.A., Petronas LNG Ltd, BP Gas Marketing Limited, Vitol SA, B.B. Energy (ASIA) Pte Ltd, Mytilineos S.A., Uniper Global Commodities SE, Marubeni Corporation, SONATRACH and Public Gas Corporation (DEPA) S.A., Eni SpA (Gas & LNG Marketing and Power), Glencore Energy UK Ltd and Mitsui & Co. Ltd.

DEFA, following customary international practice for the supply of LNG, launched an open call for Expression of Interest in June 2019. Through this process, DEFA will prequalify and proceed to contract with the LNG suppliers for the procurement of both “spot” cargos and basic quantities of gas. DEFA is expected to proceed to this next stage of the process at the beginning of the new year.

“Turning to natural gas is not only our national strategy but also our European commitment to meeting the environmental and energy goals set by the European Union. The fact that the competition has resulted in numerous and high-profile entries, makes us optimistic that we will also obtain competitive pricing,” said DEFA chief Symeon Kassianides.

With regards to the outcome of the evaluation of the tender for the construction and operation of the LNG infrastructure at Vasilikos, no challenge within the deadline was raised with the Tender Review Authority. As scheduled, the Natural Gas Infrastructure Company (ETYFA) will invite the first ranked consortium to sign the contract in the very near future, the announcement said.

Source: Cyprus Mail

new private electricity power station in Cyprus

First private electricity power station in the works

Construction on the main part of the first private power station in Cyprus will start soon, philenews reported.

The station will be located near the existing state-owned Vasilikos power plant in Mari, Limassol.

According to philenews, the earthworks, some basic infrastructure and the road network of the plant have already been completed and construction for the main infrastructure is expected to start soon.

The power station will have a capacity of 230 MW, generated through combined cycle technology.

It is expected to be able to produce electricity, equal to 17.5% of the country’s existing energy capabilities.

The station’s managing company, “Power Energy Cyprus” says that its construction will lead to a reduction in electricity prices.

According to philenews, the station is licensed to produce electricity until 2039.

Power Energy Cyprus (PEC) with consideration to the increasing energy consumption demand and to the planned electricity market liberalization, has acquired all the nescessary permits and begun construction of a state-of-the-art Combined Cycle Power Plant in Mari Area. The Power Station is anticipated to be in full operation by March 2021 and is projected to be in line with the arrival of LNG on the island. It is an estimated investment of 200 million euros.

Mari Power plant will use the latest technology in power generation. It will be a gas fired combined cycle power plant but will also be operated with diesel if necessary. The new turbines will produce electricity with less fuel therefore less cost. Furthermore, natural gas will be the primary fuel for the power plant which is much cheaper than Diesel and Heavy Fuel Oil.

The 260 MW Power Station will contribute to the reduction of electricity cost for end-users and will serve the Group plan for becoming a leading Energy Supplier in the Island

LNG terminal Cyprus tender winners

Multinational consortium named for Cyprus LNG construction

Α multinational consortium of JV China Petroleum Pipeline Engineering Co Ltd, Aktor S.A. and Metron S.A., with Hudong-Zhonghua Shipbuilding Co. Ltd and Wilhelmsen Ship Management Limited ranked first in the evaluation for the construction of the infrastructure required for the introduction of natural gas in Cyprus, it was announced on Friday.

It followed a lengthy and complex tender process overseen by the state natural gas company, Defa, in cooperation with external industry experts.

The top ranked bidder had to satisfy a series of qualitative, quantitative and financial criteria, so as to be able to demonstrate an ability to perform at the high standards set by Defa regarding the development of the Cyprus natural gas market infrastructure.

“We are pleased to see the successful outcome of the process,” Defa chairman Symeon Kassianides said. “Here at Defa we believe that the future of the country is aligned with natural gas and we expect it to play a major role in the economic development of the country in years to come. The establishment of the natural gas market will boost the development of the whole energy and industry sectors of the Republic.”

The LNG Import terminal to be constructed includes a Floating Storage Regasification Unit (FSRU), a jetty for the mooring of the FSRU, jetty borne and onshore pipelines as well as additional facilities.

The LNG Import Project is co-financed by a grant from the EU Connecting Europe Facility (CEF) financing instrument.

Source: Cyprus Mail