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Cyprus

Conclusion to interim gas issue expected soon

By Staff Reporter

THE MATTER of the importation of interim natural gas supplies for power generation should clear up soon, the chairman of the Electricity Authority of Cyprus (EAC) said on Monday.

“By the end of the month we will know what the prospects are for a conclusion on the issue of the interim solution,” Othonas Theodoulou told reporters.

“Our desire and objective is for a drop in [electricity] prices,” he added.

The EAC boss was speaking shortly after a scheduled meeting with President Nicos Anastasiades, to whom he handed the EAC’s 2013 annual report.

Theodoulou said that talks would soon get underway with the three remaining bidders on their financial offers.

The technical offers were assessed first.

According to the Cyprus News Agency, during the meeting the President told Theodoulou: “I would like to hope that I shall be hearing some pleasant news regarding a reduction in the price of electricity.”

Earlier, the Natural Gas Public Company (DEFA) had extended the tender’s period of consideration to November 30.

Back in August, it was reported that four bidders were still in contention. Reports at the time said the four bidders were: Dutch energy firm Vitol; Greek conglomerate M&M comprising the Mytilineos & Vardinoyiannis (Motor Oil) groups in cooperation with Dutch giant Trafigura; a conglomerate under Socar, the state liquefied gas company of Azerbaijan; and Israel’s Delek group.

Delek was the only bidder which publicly acknowledged participation in the DEFA tender. It’s understood that the Israelis proposed to supply gas by undersea pipeline whereas the other proposals involved LNG supply.

Through DEFA, Cyprus is seeking natural gas supplies for domestic power generation until the island’s own reserves become available. Under the tender, the date of first gas supply must fall between January 1, 2016 and June 30, 2017.

The tender calls for the supply of between 0.7 and 0.95 billion cubic metres of natural gas annually to the Cypriot market through two delivery routes. One route will begin supplying gas in early 2016 and the other no later than the second half of 2017.

DEFA is by law the sole importer and distributor of natural gas in Cyprus. Once it concludes a deal for natural gas with a supplier, DEFA will then sell the fuel to the EAC. Any contract therefore requires back-to-back agreements – one between DEFA and the supplier, the other between DEFA and the EAC – that are in sync with one other.

 



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