Construction work has begun on the ship that will convert liquefied natural gas (LNG) into the fuel’s gaseous form, burned to generate electrical power at Vasilikos, an official statement said Monday.

The steel-cutting ceremony, signifying the start of construction, was held at Cosco’s shipyards in Shanghai, China on October 29.

Once delivered, the Floating, Storage, Regasification Unit (Fsru) will berth off Vasilikos. It will receive LNG from other carriers, convert the LNG into gas, with the gas then transported onshore via a short pipeline to the Vasilikos power plant.

The start of works aboard the ship – dubbed the ‘Etyfa Prometheas’ – signals that the overall project for the LNG terminal in Cyprus is now at an advanced stage, the statement read.

In addition, upgrades now underway at the Shanghai shipyard will allow the ship to also operate as an LNG carrier, able to navigate across the globe. The vessel is already listed on the Cyprus ship register.

The contract for the LNG terminal, awarded to China Petroleum Pipeline Engineering, involves the ship (Fsru) itself, the pier where the ship will dock, and the pipeline to the power station.

The overall project should be delivered within the first half of 2023.

In monetary terms, it’s described as the single largest energy project ever undertaken in Cyprus.

The state-run Natural Gas Infrastructure Company (Etyfa) has secured €101 million in financing through the Connecting Europe Facility. Other financing involves the €43 million with which the Electricity Authority of Cyprus participates in Etyfa’s share capital; €150 million from the European Investment Bank; and €80 million from the European Bank for Reconstruction and Development.

The switch from heavy fuel oil to natural gas for power generation will contribute to Cyprus meeting its commitments on reducing greenhouse gas emissions, the statement noted.