The Cyprus Natural Gas Company (DEFA) issued tenders on Friday for the import of natural gas up to September 2018, after which Cyprus hopes to tap into its own gas supplies resulting from offshore exploration along its southern coast and near the Israeli gasfields in the Mediterranean.
The Expression of Interest for delivery to Vasilikos Power Station, available online at www.defa.com.cy, will remain open until Monday, October, 29.
DEFA chairman, Costas Ioannou, speaking at the EuroMed E&P Oil and Gas Exploration and Production summit on Tuesday said that although Cyprus has an estimated gross mean of 7 trln cubic feet (198 bln cubic metres) of gas offshore, it will take some years to develop and bring onshore.
Moreover, the need to find a cheaper form of fuel to power the electricity plants has become imperative as electricity prices in Cyprus have sky-rocketed since the ammunitions blast that knocked out the main power station in July 2011.
Cypriot households now have the highest electricity prices in Europe, according to Ioannou.
Prices are high for a number of reasons: the surcharge to pay for the explosion-related costs, EU-related carbon dioxide fines, absence of real competition and, last but not least, high fuel costs.
Despite the very sunny climate, well over 90% of electricity is produced by burning more expensive diesel and heavy fuel oil.
Last week the government sent back some of the generators it was hiring, even though they were producing electricity for up to EUR 150 mln less per year than the Electricity Authority of Cyprus, according to unconfirmed sources.
DEFA said in an announcement that the expression of interest “does not disqualify any technology. Bidders may submit any form of supply or transport of natural gas, in liquefied, compressed or any other form.”
The fast-track procedure, supervised by the Ministry of Commerce, the Energy Regulator RAEK and the state-owned EAC, will conclude by the end of 2012, just in time for the presidential elections in February 2013, with the incumbent administration hoping to win public confidence and a way out of the current economic crisis.
DEFA’s announcement added that “this interim natural gas supply solution will proceed only if the price we secure such that will result in a significant reduction in the cost of electricity production.”
