Natural gas will help drive down electricity prices says minister

The use of natural gas will help provide the island with cheaper electricity, Energy Minister George Papanastasiou said on Friday outlining the new government’s proposed energy strategy.

Speaking on CyBC’s morning programme, the minister said the goal was for natural gas to be piped directly to the island as part of any deal brokered with interested parties.

He emphasised that the fuel would be transported the short distance to the island in its gaseous state – which is precisely what makes this cheap and a feasible option for cutting electricity costs – not to be confused with the import of liquified gas (LNG).

The minister’s clarifications came in the wake of the president’s meeting with top Total energy company executives, and the commencement of drilling to confirm deposits by energy giant Chevron in the Aphrodite field of the island’s EEZ, both earlier this week.

President Nikos Christodoulides expressed satisfaction with Total’s interest following Thursday’s meeting and reported that both exploitation of deposits for the internal market, as well as reserve availability to cover EU needs, had been broached.

Papanastasiou further said the option to receive natural gas, without the need for the costly step of liquefaction, included Cyprus’ own as well as neighbouring deposits, such as those belonging to Israel. A multi-national infrastructure is being considered to transport the gas from there.

Asked whether liquified exports from the island’s deposits could compete with Europe’s current suppliers, Papanastasiou stated his conviction that the island’s LNG could compete favourably with gas currently supplied by the United States and Qatar.

The minister was also positive that the deposits currently under appraisal by Chevron will come through.

“We will know what’s what in 82 days,” the minister said, elaborating that the drilling was “a big job, from a seabed depth of 1,750m down to 5,800m below… a length of 6km.”

Papanastasiou detailed that invitations were being sent out on Friday to various companies who had stated interest in forming a supply chain conglomerate to bring about the twin vision of domestic supply and surplus export.

Responses and a meeting are expected towards the end of the month, the minister said, explaining that negotiations could be somewhat lengthy as the plan differs from previous discussion and invested parties needed to be given the time to reevaluate.

Implementation would be fast, however, the minister assured, “within two and a half years of the decision point.”

The long-anticipated arrival of LNG to Vasiliko is currently expected within the second quarter of 2024, the minister said.

As for the EuroAsia Interconnector, a subsea cable which will connect the Cypriot, Greek (via Crete) and Israeli power grids, signatures from three supply-chain component providers – a French cable manufacturer, a German substation-builder, and a Greek systems operator – are anticipated within the next few days, Papanastasiou said.

The interconnector is expected to resolve the problem of surplus and wasted clean energy (mainly solar) produced on the island.