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

Lakkotrypis on drilling

Eight offshore drills for hydrocarbons over next 24 months

Cyprus plans to carry out eight offshore drills for hydrocarbons over the next 24 months, the government revealed on Tuesday.

“Activities within the Exclusive Economic Zone are ongoing. For the next 24 months we are planning eight drills, six exploratory and two appraisal drills,” energy minister Giorgos Lakkotrypis said presenting an overview of his ministry’s work over the past year.

He did not disclose where the drills would be taking place, but said the targets have been identified.

The intention is for the drilling programme to commence by the end of this year or early 2020.

On block 7, which is currently unlicensed, Lakkotrypis said that talks are advancing to grant the concession to a joint venture of France’s Total and Italy’s ENI.

At the same time, the government is engaging with these two companies so that they form joint ventures in all the blocks in which they now hold concessions separately.

“We have reached a preliminary agreement… the legal details remain for them to cooperate in all the blocks in which they are not together,” the minister told reporters.

On the Aphrodite reservoir in block 12, discovered in 2011, he said the government is close to a deal with the concession holders – Noble Energy, Shell and Delek.

The companies have submitted a development and production plan which is to be discussed at a workshop this week.

Meanwhile negotiations on revising the Production Sharing Contract – as requested by the three companies – are at an advanced stage. More talks are scheduled for later this week.

“There remain certain legal points relating to the agreement between us, and on the optimal way of exploitation which concerns running a subsea pipeline to the LNG terminal in Idku [Egypt], liquefaction there and then transporting the LNG to world markets,” Lakkotrypis said.

The option of a land-based LNG facility in Cyprus was still on the table, Lakkotrypis added. To that end, land has been secured in the area of Vasilikos for the prospective construction of a five-train LNG plant.

However the facility would require massive amounts of natural gas to make it financially worthwhile.

During the previous week, government officials met successively with all the energy companies active in the EEZ to discuss common planning for such an undertaking.

This dialogue for an LNG facility was at its initial stages.

Regarding the envisioned EastMed pipeline – an EU Project of Common Interest with €34.5m in co-financing pledged by the European Commission – Lakkotrypis said that a tender is underway for a detailed technical study.

The study’s purpose would be to gauge how competitive the mooted pipeline can be.

On Italy’s stance on the EastMed – following recent reports that Rome was getting cold feet – the minister said Nicosia has yet to receive an official briefing from the Italians.

The government expects the Italians to clarify their position after the European Parliament elections.

Regarding the use of FLNG (floating liquefied natural gas), Lakkotrypis said the technology is yet to be proven. But he did not rule out any method for developing Cyprus’ natural gas resources.

As for the newfangled East Mediterranean Gas Forum, the “vision” is for it to evolve into an international energy organisation that will discuss infrastructures and project timetables.

The minister noted that in view of the increased demand for natural gas and thus heightened competition, Cyprus and the eastern Mediterranean must become competitive in the global market.

Asked about the Turkish provocations in Cyprus’ EEZ, he said Nicosia is deploying both diplomatic and legal measures, whether these pertain to Turkey itself or the companies assisting.

“We are using all the tools at our disposal.”

On ‘Green Growth’, the minister said that the share of renewable energy sources (RES) in gross total energy consumption in Cyprus currently stands at 9.72 per cent; the goal is for this to reach 13 per cent by the year 2020.

The share of RES in energy consumption in road transport alone was at 2.6 per cent in 2018, with a target of 10 per cent for 2020. This target would be achieved by a steady increase in the use of biofuels.

Source: Cyprus Mail

Lakkotrypis Minister Exxon

MPs welcome news of gas find

Lawmakers on Tuesday sounded optimistic about ExxonMobil’s recent discovery of natural gas offshore Cyprus, some opining that the find could put the island back on the energy map.

MPs were given a behind-closed-doors briefing by Energy Minister Giorgos Lakkotrypis and head of ExxonMobil Cyprus Varnavas Theodosiou.

Speaking to reporters later, MP and chair of the House energy committee Andreas Kyprianou said the briefing confirmed “the very important results, especially optimistic for the Republic of Cyprus both in terms of energy and geopolitics.”

Last week Exxon announced a gas find of 5-8 trillion cubic feet (tcf) in an offshore field inside Block 10 of the island’s exclusive economic zone (EEZ). The discovery re-ignited talk of construction of a liquefied natural gas facility on the island, although more quantities of gas would be needed.

According to the information given to MPs, the US oil and gas giant is considering further drilling in the EEZ, within Block 10 and possibly in other licensed acreages.

“The signs are encouraging,” said Diko MP Angelos Votsis.

“Most importantly, ExxonMobil are here to stay, and their interest in the Cypriot EEZ remains strong.”

The recent discovery boosts prospects of having an LNG plant in Cyprus, although this would take years and depended on additional gas discoveries, Votsis added.

For it to be viable, an LNG plant would require a capacity of 10 to 15 tcf. The 5 to 8 tcf discovered in Block 10 falls well short of that, but Exxon have intimated they will continue their search for gas.

For his part, Akel’s Costas Costa welcomed the discovery but said that at the same time it puts the onus on the government to develop a coherent and consistent energy policy.

The Akel deputy also asked the energy minister for an update on the talks between Cyprus and Israel regarding the commercial development of the Aphrodite gas reservoir in Block 12.

A small part of the reservoir is said to lie within Israel’s EEZ. The companies involved on either side have thus far not reached agreement on how to divvy up the resources.

According to Costa, Lakkotrypis said only that negotiations with Israel are ongoing.

The energy minister was also asked about the state of play in the talks between the government and the companies holding the concession on the Aphrodite field (Noble, Delek and Shell).

The companies are reportedly seeking to amend the production-sharing contract they signed with the government.

Lakkotrypis told MPs that discussions on this are continuing and that an outcome should be expected “soon.”

Source: Cyprus Mail

new private electricity power plant in cyprus

Private power plant marks ‘new era for energy sector’

The operation of the first power plant by a private initiative will mark the beginning of a new era in the energy sector and contribute to significantly lower electricity prices, President Nicos Anastasiades said on Friday after laying the foundation stone for the plant at Vassiliko.

At a cost of some €200m, the plant of Power Energy Cyprus (PEC) is due to be completed late 2020 or early 2021.

Chairman of Cyfield group of companies which will construct the plant, Kyriacos Chrysochos, said it would have the capacity to produce 260 MW and would be able to serve up to a third of the current needs of the country.

Households, he said, would immediately notice the difference in their monthly expenditure and businesses’ cost would drop.

The station will operate with a new combined cycle technology, with two gas turbines, which will burn natural gas, and a turbine to convert emissions into steam and use it for extra electricity, he said.

The power generated from the new plant will be available through the electricity authority’s grid, while the network will be managed by an independent authority, the Cyprus Transmission System Operator.

“The electricity produced at the plant will be directly supplied to consumers, who will have the option of connecting and purchasing electricity from the supplier of their choice,” he said.

In his address, Anastasiades said that the project was of strategic value to Cyprus as it would contribute to changing the electricity supply map in the country.

“It is at the same time a project which will contribute to both the growth of the country’s economy and to significant reduction in the price of electricity throughout the economic spectrum,” he said.

The project, he said, was planned, funded and was being implemented solely on private initiative and funds. He said however that the reform of the regulatory framework was also necessary.

For this reason, he said, the government had modified the electricity market regulations, strengthened the Cyprus Transmission System Operator with additional personnel and amended the legal framework so that the Energy Regulatory Authority (Cera) could establish a transitional arrangement.

Furthermore, he said, the government made changes within the state-run electricity authority (EAC) “in order to enhance transparency and regulatory control… in order to be able to support the state’s objectives in terms of the management of renewable sources in the country’s energy blend.”

“Our actions to open the internal energy market are constantly expanding,” Anastasiades said.

Cera, he said, has already issued 10 new supply licences to independent suppliers, while two more applications for a supply licence are under consideration.

Energy costs and lack of environmentally friendly choices has been an obstacle to the growth potential of the country, he said.

The new energy landscape would create prospects for those growth initiatives that had been shelved while households would also benefit, he added.

But the reduction in the cost of electricity for businesses and households, he said, will come through the coordinated promotion of the four main pillars of energy policy; the operation of a robust competitive electricity market, the arrival of natural gas and its use in power generation, the promotion of renewable energy sources, along with the installation of intelligent electrical energy storage systems and systems and promoting measures to increase energy efficiency.

Anastasiades said that the government has also launched procedures to create the necessary infrastructure for importing natural gas for use in power generation.

“The cost of these investments is particularly high and that’s why I consider it a great success for our country that we have secured from the European Union funding to the tune of €101m for the creation of the necessary infrastructure,” he said.

The combined cycle gas turbine power station is being located on land leased from the Cyprus Ports Authority north of the Evangelos Florakis naval base.

Source: Cyprus Mail