Minister of Energy, Commerce and Industry George Papanastasiou, said on Thursday that the government’s goal is energy adequacy and affordable prices of electricity for the consumers, adding that the Vasilikos natural gas Terminal should be completed as soon as possible and operate safely for many years to come.
Speaking at the Cyprus Forum, in Nicosia, the Minister said that that “this Government must and will finish the Terminal.”
He noted that the Natural Gas Infrastructure Company (ETYFA) which is the owner of the project, has appointed a French energy firm to advise it on how to complete the project. The most critical report, he said, is the gap analysis, that is, to check the design of the project with the construction of the project and with the materials that are ready to be installed. If there is a large gap between design and construction, then the project should be redesigned so that it can be completed as soon as possible but also operate safely, Papanastasiou continued.
The project, the Minister continued, consists of three parts. The first is the vessel, the floating regasification unit, secondly the pier and thirdly the site on land. He explained that the ship “which is the most important asset and which has cost approximately 180 million euros to date, is 99% complete, so it is ready, which gives us very good prospects for having the natural gas as soon as possible.” The pier, he said, and the land part are 45 to 50% complete. These are not difficult projects, he said, noting though that procedures in the public sector create delays.
“The ship is ready and can be used at any time” Papanastasiou noted, adding that there are thoughts of using it with temporary arrangements.
Asked whether the competitive electricity market that was introduced in Cyprus yesterday will reduce prices, he said that the Cyprus market is very small, which often does not create healthy conditions for competition. Whether prices will decrease or increase, or remain the same, he said, will depend largely on the participants. If consumers do not have demands and remain with their traditional supplier, then competitive conditions will not be created, he stressed. For the consumer, the Minister said, a competitive market means that they will be able to choose a supplier that offers the best price at the times they need it. Papanastasiou pointed out that if there are any distortions then the state can regulate the market.
The Minister also spoke about the penetration of Renewable Energy Sources into the electricity mix and said, among other things, that what is needed is production storage such as batteries. We decided, he said, that we will create a central storage system for the stability of the network. In addition, he said that by the end of the year there will be a plan to subsidize batteries for homes so that the power from the photovoltaics can be used back to the homes when needed. For those who cannot install a photovoltaic system, e.g. apartment buildings, he said that there will be energy communities, with the first one in the community of Kato Pyrgos Tyllirias with a subsidy from the European Commission.
The Minister also referred to the electrical interconnection, the Great Sea Interconnector, saying that it is a European project noting that it is not up to us if it is sustainable or not.
Whatever we say, he continued, the project is a European one, it receives 657 million in funding from the Commission. Whether we will be shareholders in this project this is another decision, Papanastasiou said.
The electrical interconnection, he noted, has three challenges. The first is funding. If the project is currently estimated at 2 billion euros, the EU has provided 657 million and provided access to another 100 million, so 757 million, he said, adding that the rest will have to be found from other sources of funding. The second challenge is the technical issue, he said, as the sea between Cyprus and Crete, is 892 kilometers long and 3 kilometers deep. The third challenge is a geopolitical one. This issue requires management and not the cancellation of the project, the Minister stressed.
In relation to developments in Cyprus’ Exclusive Economic Zone, Papanastasiou said that the two mature projects, are in the gas fields of Aphrodite and Kronos that are in development. Kronos is on fast track, he noted, as there is infrastructure next to the Zohr field in Egypt and it is very easy to connect the field to the infrastructure. He said that they have with Egypt a “most crucial agreement”, the host government agreement, according to which the Kronos gas will enter the Zohr infrastructure then go to a processing point in Egypt and from there by a pipeline the gas will be transported to the Egyptian city of Damietta for liquefaction and export. The alternative, he said, “is to pump gas into the local market of Egypt if the parties decide so.”
Regarding Aphrodite, he said that the unit will be located in the sea on the field and the pipeline that will connect it to the land in Egypt (Port Said) will transfer clean gas that can go to the local market and for liquefaction.
Asked if export from Kronos will begin in 2027, the Minister said that it is a realistically optimistic scenario and that all parties are working for that goal but noted that it is a goal that is not easy to achieve.