The immense need for natural gas in Cyprus and the terminal as the fastest and most realistic option

It has been more than 15 years since the first hydrocarbon deposits were discovered in Cyprus’ Exclusive Economic Zone (EEZ) - specifically in block 12 aka “Aphrodite” - creating huge expectations over the prospects this would create for the island at an energy, economic, but also geopolitical level.

It was then that everyone, or almost everyone, envisioned this leading to a new energy model for the country free from crude oil, but also the incalculable economic benefits that could arise through its extraction and commercialisation.

That is, with the Republic of Cyprus becoming a strong energy player within the territory of the EU, supplying natural gas to Europe and beyond, with all the economic benefits that this would entail.

Many others, meanwhile, hoped the hydrocarbon discoveries would work as a negotiating tool, a catalyst that would lure Turkey in and lead to a solution of the Cyprus problem.

Of course, none of this has happened; the expectations have not been met, natural gas has yet to be extracted and Cyprus has certainly not become an exporter.

Putting aside the geopolitical/geostrategic aspect, as well as the big dreams and expectations, the need for Cyprus to add to its energy mix is still as immense as ever.

Indeed, the passage of time coupled with the constantly increasing price consumers pay to use crude oil for electricity production has made it perhaps more necessary than ever.

With this in mind, back in December of 2019, the government signed a contract with the Chinese consortium CMC to build and operate a floating storage and regasification unit (FSRU) in Vasilikos, as an interim solution for Cyprus to transition from crude oil to natural gas until the Republic is in a position to exploit its own reserves.

This project, Cyprus’ biggest energy investment in recent history, was to enable the island to important liquefied natural gas and regasify it in the FSRU to be used for domestic power generation.

Fast forward to the present, the terminal is not ready while the FSRU is trapped in Shanghai despite being owned by the Natural Gas Infrastructure Company (ETYFA).

But the issue at hand right now is not what happened in the past, but what we’re going to do “the day after”; how and when Cyprus will finally be able to introduce natural gas into its energy ecosystem.

With the negotiations with the Chinese consortium to "release" the floating unit being in their final phase and heading, as we are in a position to know, for a happy ending by the end of this year, but also with the procedures for completion of the onshore infrastructure and the jetty moving ahead, news has emerged in the last few days about discussions and an upcoming agreement between the Republic of Cyprus and Israel for the supply of natural gas to our island from the neighbouring country through a pipeline; specifically from the Karish and Tanin fields, which are operated by Energean.

Energy Minister George Papanastasiou rushed to clarify that there is no updated proposal for the supply of natural gas from Israel, and stressed that the completion of the FSRU in Vasiliko is the fastest and most realistic proposal to import natural gas to Cyprus.

But, we believe that where there is smoke, there must also be fire…

Not because we are dogmatically against the import of natural gas from Israel, just as we are not dogmatically against the planned opening of the natural gas market, but because we believe that before Cyprus proceeds with any other intermediate solutions, it should first exhaust all possibility of completing and operating the terminal at Vasilikos.

A project of the utmost importance in terms of the country's energy infrastructure, which if abandoned, will be a huge setback in the effort to enrich our energy ecosystem.

Even Papanastasiou admitted just the day before yesterday that the terminal solution is the fastest and most realistic proposal for importing natural gas to Cyprus.

Let the necessary time be therefore given to the negotiation for the floating unit, let ETYFA be given the necessary time to put the land infrastructure and the jetty back on track for implementation and completion.

And if within the reasonable period of time required for the success of the efforts there is no positive result, then and only then should any other potential intermediate solutions for the arrival of natural gas to the island be explored and examined.