The Cyprus Natural Gas Public Company (DEFA), announced Friday that a Chinese-led consortium has been chosen as the preferred bidder for the construction of a €250 mln LNG import terminal and related infrastructure.
Announcing it as “a step closer to the establishment of the natural gas market in Cyprus,” DEFA said the 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 were ranked first in the evaluation for the construction of the infrastructure required for the introduction of natural gas on the island.
The other two consortia bidding for the multi-million contract were: Consortium Samsung C&T, Posco E&C, Mitsui O.S.K. Lines, Osaka Gas; and, European Consortium (DAMCO Energy S.A., ENAGAS Services Solution S.L.U., GasLog LNG Services Ltd., SNAM Spa, TERNA S.A.).
DEFA said the successful tenderer will be invited to Nicosia the soonest for the finalisation of the process and the signing of the contracts with ETYFA (Natural Gas Infrastructure Company).
The LNG import terminal 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 of 40%, or up to €101 mln from the European Union’s “Connecting Europe Facility”.
“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 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,” said DEFA Chairman, Dr Symeon Kassianides.
The LNG terminal at Vassiliko is scheduled for completion in 2021.
DEFA’s tricky tender process – launched last year – closed on July 12, its fourth attempt to nail down a supplier of natural gas.
It had extended the deadline several times to allow companies interested in bidding sufficient time to put together top-quality proposals.
But as this process unfolded, Greek firm Energean Oil & Gas was lobbying hard to be allowed access to the Cyprus market so it can sell its Israeli gas via pipelines to Vassiliko by early 2021.
Officials from Energean visited Cyprus to make their pitch to supply gas via a pipeline from Israel which it claims will be cheaper and quicker.
Although the government has rebuffed Energean’s “unsolicited offer”, the Greek firm insist they can deliver quicker than the FSRU project and that competition should be allowed for the benefit of the end-user.
Even if the figures add up financially, Nicosia is reluctant to abandon its plan as it doesn’t want to be dependent on a single supplier and forsake the construction of an LNG terminal.
Energean has submitted to the Cyprus Energy Regulatory Authority (CERA) an updated proposal to supply the island with natural gas through an FPSO, which will commence operations in March 2021 in the EEZ of Israel.
There have even been some suggestions the Greek firm could seek legal action to force its way into the Cyprus supply chain.
Complicating matters is that the government has declared the natural gas market in Cyprus as isolated and emerging.
It effectively means that DEFA is not only the sole importer and distributor of natural gas on the island but also the solitary entity allowed to supply the fuel.
