The government is planning to construct a jetty at Vassilikos port to host a floating storage facility for liquefied natural gas (LNG) to be used for power production, it emerged on Thursday.
According to local daily Phileleftheros, the plan is for Cyprus to start importing LNG at the end of 2019, with the state-owned electricity authority (EAC) pledging to have modified its generators to burn natural gas as of 2020.
In addition to the EAC, three private companies that have already been licensed to generate electricity in Cyprus but are unable to as gas is not yet available, are keen on seeing the project press ahead.
The cost of building the jetty, as well as an emergency shelter for the floating storage and regasification unit (FSRU) in case of adverse weather conditions, has been estimated at €340 million.
The state-owned Natural Gas Public Company, which by law will be the sole importer of natural gas into the Republic, has already decided to hire advisors with a view to invite tenders by early 2018 for the supply of natural gas and the construction of the jetty.
The project is eligible for co-financing by the European Union’s Connecting Europe Facility, up to 75 per cent of the total cost.
According to the plan, the winning bidder will receive a fixed income for the first 10 years, regardless of the quantities of LNG imported and regasified.
Cynergy, as the project has been termed, is a proposed approach “towards the establishment of a natural gas supply system on the island of Cyprus”.
“It will focus on executing all the necessary market-related, technical and financial, commercial, environment and permitting studies for the development of the supply chain, the market roll-out and the introduction of LNG and CNG [compressed natural gas] as alternative fuels in the energy and transport sectors,” a 2016 Connecting Europe Facility report said.
The planned investment includes the construction of a jetty, at an estimated cost of €53.5 million, to serve a permanent FSRU, as well as infrastructure to serve an LNG carrier at a cost of €148.7 million, which will include on-shore pipelines to transport the regasified LNG to the EAC power-production plant at Vasilikos.
The jetty will extend 750 metres southward into the sea, turning south-west for another 436 metres.
An emergency shelter designed to host the FSRU in case of adverse weather conditions is expected to cost around €100 million.