Cyprus ‘an attractive gateway for energy investment’

Cyprus is an “attractive gateway for energy investment”, Energy Minister George Papanastasiou said on Sunday.

Speaking at the Capital Link Cyprus business forum in New York, he said the island is in “a very good location, close to Africa, next to the Middle East, and is a member state of the European Union”.

He also made reference to recent upgrades in Cyprus’ credit rating by international ratings agencies, describing them as “signs of credibility”.

“When you receive such upgrades, you cannot be ignored as a country,” he said.

He went on to say that his ministry is working to reduce energy costs and “provide solutions” for consumers, while also speaking about the finding of natural gas under the seabed off Cyprus’ coast.

“What is missing is the infrastructure,” he said, adding that the lack of infrastructure to extract and liquefy the natural gas off Cyprus’ coast is “hindering the development of these deposits”.

“We are trying to develop the wealth that is in Cyprus’ exclusive economic zone [EEZ],” he added.

On this matter, he spoke of recent agreements signed between Cyprus and Egypt, one of which concerns the ‘Aphrodite’ deposit in Block 12 of Cyprus’ EEZ, and the other of which is a ‘host government agreement’, signed by Cyprus, Egypt and the consortium comprising French multinational corporation Total and Italian energy company Eni over Block 6 of Cyprus’ EEZ.

This agreement sets Egypt as the “host government” for Block 6 and the ‘Kronos’, ‘Zeus’, and ‘Kalypso’ gas fields which are present under its seabed, meaning that the gas extracted will be sent to the Segas liquefied natural gas (LNG) terminal in the Egyptian port city of Damietta for liquefaction.

Given the proximity of the Kronos reservoir and Block 6 to Egypt’s ‘Zohr’ gas field, which Eni also operates, Eni will be able to use its own infrastructure to take the Cypriot natural gas to Damietta.

Papanastasiou also spoke on Sunday about the ongoing Great Sea Interconnector project, saying there is “significant investment interest in the project from countries such as the United Arab Emirates and France”.

Last month, Greece’s independent transmission system operator Admie’s had  temporarily suspended payments to French technology company Nexans for the manufacture and installation of submarine cables for the project, which is set to connect the electricity grids of Greece, Cyprus and Israel.

Papanastasiou said at the time that the decision was understandable “in the context of the technical, fiscal, and geopolitical risks inherent to the project”, with it having been revealed that payments were suspended after Turkish warships had reportedly “disrupted” seabed surveys related to the project.

Admie to date has paid Nexans about €200 million while the next installment of €70m had been due on February 28. In the event that Nexans decides to trigger a compensation clause should the project stall, Admie would have to reimburse the European Union for €160m in funds already disbursed.

Admie, a 51 per cent stakeholder in the project, is still awaiting the Cyprus government’s decision over whether or not it will pay the €100m it has requested to buy into the project’s holding company.

The Cypriot government took receipt of a cost-benefit analysis for the plan in July, but two months later in September, George Panteli, the finance ministry’s then permanent secretary, had said Cyprus’ authorities had not yet seen the project’s financing plan.

He said his ministry was at the time “not in a position to put forth” any concrete statement regarding the project’s risks, neither from a geopolitical standpoint, nor regarding the potential impacts of the project on Cyprus’ economy and energy market.

The wait for a decision had irked Greek Energy Minister Theodoros Skylakakis earlier in the year.

He had said Cyprus may miss deadlines should it delay a decision on the matter, and pointed to the European Commission’s financial support for the plan under its Connecting Europe Facility, and an extra €100m pledged through the European Union’s Recovery and Resilience Facility.