Government stepping up effort to introduce natural gas to domestic market

Energy Minister Giorgos Papanastasiou said the new government is stepping up efforts to introduce natural gas to the country, from fields in the region as well as those of Cyprus’ Exclusive Economic Zone (EEZ).

Speaking at a conference in Nicosia on "Green Transition and Entrepreneurship”, the Minister announced that his Ministry was preparing a new national energy policy that will focus on smaller projects, all aimed at bringing natural gas to Cyprus for power generation.

He also said that he didn’t think the natural gas from the “Aphrodite” gas field in block 12 of Cyprus’ EEZ should end up in Egypt’s liquefaction terminals, in a complete U-turn from the previous government’s efforts. Instead, he said, the gas should be used by Cyprus to reduce its energy costs.

"Our approach around the use of natural gas as a transition fuel is being reviewed and we are including the natural gas found in the Eastern Mediterranean, and more specifically Cyprus’ EEZ, in the mix for use in the domestic market," he said.

Responding to a question about the EastMed pipeline - a planned offshore/onshore natural gas pipeline, directly connecting East Mediterranean energy resources to mainland Greece via Cyprus and Crete, which however was deemed unviable after the US withdrew its support – Papanastasiou said it was "a geopolitical project" and that "in order for a multi-billion investment pipeline to survive, it must have a payback horizon". As he said, the EastMed pipeline did not have a payback horizon because natural gas has an end date due to the green deal.

And so the minister said it is the smaller projects that survive, hence the government’s decision to base the national energy policy on small projects that will bring natural gas to Cyprus for power generation. Papanastasiou reasoned that as this was quite a large investment, the government was thinking of creating a small natural gas liquefaction terminal to export gas to Europe and elsewhere.

Regarding his thoughts on Aphrodite, Papanastasiou said that a proper state looks at its own best interests first and then its neighbours.

He added that the fact that "there is infrastructure in Egypt does not mean that you can easily get our natural gas to Egypt with the existing infrastructure".

Meanwhile, Papanastasiou referred to the important measures and reforms his ministry would be introducing, including grant schemes totalling €80m to promote large energy storage systems and the implementation of the National Action Plan, amounting to €98m, to transform the Cypriot economy into a circular one. The budget includes €35m for the installation of smart meters, as well as €100m for investments in the electricity network to support the green transition.