Cyprus Mail
Cyprus

Ninth extension for interim gas project

The Natural Gas Public Company (DEFA) has again extended the validity of a tender for the import of natural gas for electricity generation.

The tender validity period, which previously expired on December 18, has been pushed back to February 12, 2016.

It is the ninth consecutive extension since the call for tender was issued in January 2014.

The DEFA 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 power company.

Cyprus is reliant on heavy fuel oil imports for electricity generation, and wants to switch to the cheaper natural gas until its own offshore reserves come on tap.

DEFA’s end-stage negotiations with preferred bidder, Vitol, have dragged on for months. The Dutch energy firm is proposing a solution involving a Floating Storage and Re-gasification Unit (FSRU).

Tankers transporting LNG dock with an FSRU and load the liquid gas onto it. A vaporizer on board the FSRU – sitting out at sea, at a short distance off the coast – turns the liquid into gas, which is piped ashore. The gas is then burned to generate electricity.

Also in the running is Delek, the only bidder proposing to pipe the gas directly from the source – Israel’s Leviathan gas field.

This is the second tender for the import of natural gas. The first was scrapped in autumn 2013, when DEFA broke off talks  with the then-preferred bidder, Russian company Itera.

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