Domestic gas needs

Papanastasiou was similarly circumspect about the timeline for finalizing infrastructure to meet Cyprus’s own gas needs, which he estimated at around 0.6 Bcm/year.

Even as the country seeks to bring its gas deposits to market, it is also trying to become an LNG importer.

The government has spent the better part of a decade developing an LNG regasification terminal to replace the fuel oil and diesel that power some 80% of its electricity generation with gas.

The road has been fraught. The development at the southern port of Vasilikos has been plagued by delays and disputes, leading to the termination of the initial EPC contract with a consortium led by China Petroleum Pipeline Engineering, according to an analysis from Commodity Insights.

The terminal remains “50% completed,” and French engineering company Technip Energies is developing a report assessing any shortfalls in the existing terminal design to help finish the work, according to Papanastasiou.

“If these gaps are manageable, then we will proceed very fast in order to complete the terminal,” he said.

The minister declined to give a more precise estimate for when he expects the terminal will be ready, citing Technip’s ongoing analysis.

Until receiving the report, “I cannot provide a secure timeline,” he said.

Israel pipeline

Another option to bring gas to the island has recently surfaced. Gas-focused producer Energean has signed a letter of intent to potentially sell gas from Israel to Cypriot energy group Cyfield via a proposed new pipeline connecting the East Mediterranean countries.

Papanastasiou said the ministry is “evaluating” the idea.

The pipeline would be significant due to Cyprus’s status as an emerging gas market under the EU’s Gas Directive. This allows it to have a monopolistic gas supplier: publicly-owned Cypriot gas company DEFA, which is the sole permitted importer and distributor of gas in the country.

Approving the Energean deal would require Cyprus first to change its emerging market status with the EU.

While Papanastasiou acknowledged the value of having alternative supply sources, the minister cast doubt on the viability of the pipeline proposal given Cyprus’s limited gas needs.

“This is a very niche market,” he said. “Having an LNG terminal on its way to be completed — not both projects can survive for such a small quantity.”

Energean has framed the proposal as a way to bolster Cyprus’s energy security.

“Countries and governments should look to bring competition, security of supply, and low gas prices for the consumer,” CEO Mathios Rigas told Platts, adding, “Protectionism and overregulation doesn’t help the free market.”

Platts, part of S&P Global Commodity Insights, assessed the East Mediterranean LNG marker at $10.309/MMBtu Nov. 5.