Cyprus & World News

Natgas interim decision by March ; IEC, Qatar keen to bid

06 February, 2014

Cyprus Energy, Commerce, Industry and Tourism Minister Giorgos Lakkotrypis said that the interim solution for the arrival of natural gas for energy production is expected to be clarified by March, when the proposals will be submitted by the companies concerned.
Speaking after a meeting with the President of the European Party (EVROKO), and asked about the ‘interim solution’, Lakkotrypis said the process began on January 25 when the open competition was published in the EU official gazette.
“We expect those interested to get the relevant documents and the process will be open until March, when I expect to have the calls from interested parties,” he said.
Asked about an agreement between Cyprus and Israel on the supply of natural gas, the Minister said that “the discussion on the governmental level has taken place so that Israel will allow us to get natural gas when this is available. It is up to the companies themselves to find the sources of natural gas and participate in the competition announced by the Natural Gas Public Company (DEFA).”
Asked about Turkey’s provocations within the Cyprus Exclusive Economic Zone, chasing away a Norwegian exploration vessel, the minister reiterated that the government will continue exercising its sovereign rights and struggle for justice.
The Israel Electric Corp., as well as the world’s third largest gas exporter, Qatar, are expected to bid for the supply of natural gas to Cyprus, until such time as the island’s offshore gasfields prove commercially viable and start production in about a decade.
The Natural Gas Public Company (DEFA/Cygas) announced an invitation for an open competition for the supply of natural gas for a period of up to ten years commencing January 1, 2016.
According to the announcement, DEFA’s requirements are for a supply of natural gas for delivery at the station boundary at the Vasilikos power station.
Israel Electric, a partner with the Electricity Authority of Cyprus, Cyprus-based Quantum Corp. and the Greek Public Power Company (PPC/DEH) in the sub-sea EuroAsia Interconnector electricity cable along the eastern Mediterranean, has reportedly shown interest to bid for the DEFA contract, according to the Israeli news site Globes.
IEC’s venture partners in the bid are expected to be BP and VITOL, the Dutch energy trader currently building a 300-mln-euro storage terminal near the Vasiliko hub.
The Globes report suggested that the IEC bid would probably be about 33% cheaper than the cost of fuel that the EAC currently imports in Cyprus.
A previous bidder, Itera of Russia, was rejected as it had offered a rate nearly 30% above the current rate EAC was paying for.
President Nicos Anastasiades returned from a three-day official visit to Qatar last week heading a major state and trade delegation, where among others, cooperation in the fields of energy supply, infrastructure projects, exploration and production was also discussed with the Emir.
Government officials confirmed that Qatar may be interested to bid for the DEFA contract as well.