By Elias Hazou
FORMER energy czar Solon Kassinis is heading up to the Palace today for a talk with the President that may – or not – clear the air on the government’s approach to energy policymaking.
Kassinis, executive vice-chairman of the Cyprus National Hydrocarbons Company (CNHC), known in Greek as KRETYK, was called to the Palace by Nicos Anastasiades after threatening to quit last week. Their meeting has been scheduled for around 6pm.
Despite the warning shot, Kassinis has not yet tendered any letter of resignation, and his chat with the President may determine whether he decides to stay on.
The outspoken official feels snubbed at being left out of a team appointed earlier this month by the Cabinet to negotiate with Noble Energy and other companies the earliest possible supply of natural gas from offshore block 12 and the construction of an LNG plant as soon as possible.
According to the official announcement at the time, the team members are: Stelios Chimonas (chairman), permanent secretary at the trade and energy ministry; Nora Nicolaidou, state’s attorney; Stelios Koundouris, treasury accountant; Eleni Vasiliadou, chairman of the Natural Gas Public Company; Odysseas Michaelides, head of the department of control, ministry of communications; and “a representative from the CNHC.”
The latter wording was perhaps deliberately left vague, sources told the Mail.
They said Kassinis, who until recently headed a committee tasked with evaluating gas exploration licences, was omitted from the new team negotiating with Noble, apparently by Chimonas, the current permanent secretary at the energy ministry.
The team is now composed of people with little experience in the field, some of whom were previously subordinates to Kassinis – a move that did not sit well with the former director of the Energy Service.
But personal ambitions or antagonisms aside, the same sources said, the administration’s handling of energy decision-making so far leaves a lot to be desired.
The energy ministry has stripped the CNHC of some of its key powers. Whereas the entity was set up as the commercial vehicle for the LNG project, curiously it was not a party to the signing of a preliminary agreement for the development of an LNG plant on the island.
Instead, the June accord was concluded between the government and a US-Israeli partnership, with the CNHC relegated to the status of observer despite having done all the legwork.
“Perhaps it was a case of the energy minister taking all the glory,” sources said, adding there was no doubt the CNHC has been sidelined.
Minister Giorgos Lakkotrypis recently informed the CNHC that this removal of powers was temporary and that he would reinstate them at a later date.
The organisation meanwhile is operating on a shoestring budget, something that has limited its scope of functions.
The government had hired the services of a Norwegian law firm as consultants to draft a review of the energy sector. Their findings have since been forwarded to the energy ministry, which apparently is sitting on them.
Among others, the consultants recommended that CNHC and the Natural Gas Public Company (DEFA) be merged and moreover that CNHC should be the ‘command vehicle’ for the LNG project in Cyprus.
But the government’s intentions on re-organising and/or merging the two entities remain unclear.
Another worrying sign, the sources said, is the apparent holdup in reaching an agreement for the import of interim supplies of natural gas for electricity generation.
Media reports have hinted that preferred bidder Itera has proposed extending the supply period to 2020 or 2021 – the tender had initially set a deadline of late 2018.
“Does this signal that the timetable for an LNG plant producing electricity from our own gas has been pushed back?” the sources asked.