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Cyprus

Cyprus scrambles to find new location for gas support infrastructure (updated)

Following the Larnaca municipal council’s rejection of a request to allow the temporary operation of a company that provides logistics for hydrocarbon exploration, the government on Tuesday was scrambling to find alternative venues while concerns were raised that Cyprus risked losing much needed business.

On Monday evening, the council voted against allowing the operation of the company, whose services were going to be used by energy giants Total — that plans to undertake exploratory drilling off the island’s coast – and ENI.

Total wanted a six month extension while ENI had asked for a year, with an option for an additional six months after that.

Extension of the company’s operation is opposed by residents who fear that the town’s port would be turned into an industrial hub with all the risks to their health and the environment it would entail.

This, they said, would also put an end to any prospects of tourist development in Larnaca.

Chairman of the Oil and Gas Association Andy Varoshiotis said the energy and transport ministries were engaged in consultations on Tuesday to find space for Medserv to move, most likely to Limassol.

However, Varoshiotis told the Cyprus Mail that he was concerned that the decision could drive companies out.

“I hope we don’t lose any companies and continue to be business friendly,” he said.

The government was trying to find a temporary site in Limassol until a permanent solution was found near the town’s port.

Transport minister Marios Demetriades said on Tuesday that the government had informed the two companies of space available at the Limassol port in two letters, on November 20 and 30, last year.

“We remain at the company’s disposal for another meeting,” he said.

“We have met a number of times, to look at ways of granting them available space for their operations.”

The money spent on moving was not the main issue, Varoshiotis said.

He added that ENI was considering moving to Egypt while the decision could delay Total’s exploratory drilling.

Thirteen councillors voted against the extension, 12 in favour, and one abstained. One councillor was absent.

“I believe it was not an easy decision for anyone,” Mayor Andreas Louroudjiatis said after the vote. “Our discussion was whether to give a positive recommendation or not. The government policy was expressed through the cabinet decision to move the facilities in August 2016.”

He said he was in favour of approving the request, “considering all the parameters linked to the issue, that is, our country’s needs, the good of the economy, and the benefits our town would have. But the majority’s decision is respected and this is the decision we will follow.”

The government could ignore the decision and extend the permit but it was unlikely to do so a couple of months before the parliamentary elections.



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