Cyprus may open tenders by the end of this year for the storage of natural gas as it attempts to switch to cleaner forms of energy, Commerce and Industry Minister Antonis Michaelides said ahead of a decision by the Cabinet on whether Cyprus will use floating or inland LNG storage facilities.
Michaelides said the island would explore through the tender process the establishment of gas storage facilities offshore, a stop-gap option for their longer-term goal of land facilities.
“We will have to appoint a consultant to draw up the [tender] specifications, I expect that to occur in about eight months, the end of the year,” Michaelides told Reuters.
Cyprus relies on heavy fuel oil firing its power grids but must start introducing renewables to its energy mix under European Union obligations.
Solar energy represents 4.0 percent of the island’s energy balance but the total contribution of renewables must be raised to 9.0 percent by 2010.
A ministerial advisory committee has recommended the establishment of onshore Liquefied Natural Gas (LNG) facilities, a venture which could take up to seven years to get off the ground.
Cyprus will also look at the option of offshore storage which could get gas supplies in quicker.
The state has been involved in a very public spat with the key electricity utility, EAC, over the offshore storage unit option. The EAC is against a floating storage unit, arguing that the technology is untested and could result in wastage of taxpayers’ money.
Authorities say they are keeping their options open, committed to a land storage facility in the long run but in the short term compelled to also look at offshore units.
“It will be a balanced approach which will be beneficial to both the EAC and the consumer,” Michaelides said.
The Cabinet is expected to discuss supply proposals on June 6.
EAC Chairman Charilaos Stavrakis has described as “unrealistic and extreme†the estimated cost of CYP607,9 up to CYP 780,1 mln from a delay in bringing natural gas to Cyprus between 2009-2015.
He said the EAC will act accordingly, once the government decision is known.
Stavrakis said the estimated cost is based on extreme assumptions, such as import of very expensive equipment by EAC which will burn natural gas while the land terminal is being built.
The difference in opinion between EAC and the government lies in plans to construct a land terminal for the supply of natural gas with a simultaneous project to have a floating platform, while the land terminal is being built, expected to be completed around 2015.
