Cyprus Mail 4 December 2020 - by Andrew Rosenbaum
“The import of gas into Cyprus has the potential to transform the country’s economy and, as a result of this gasification of the island and the region, is already bringing in millions of euros,” Cyprus Natural Gas Public Company (DEFA) chairman Symeon Kassianides pointed out.
Speaking at a webinar sponsored by the Petroleum Economist magazine entitled “Unlocking the potential of East Med Gas,” Kassianides explained the many benefits of the import of gas to Cyprus.
“Not only does it permit the reduction of electricity costs, which are among the highest in Europe, but also because it will permit the opening up of the electricity market. This has been open for some time, but the sale of electricity to the grid depends on the arrival of gas on the island – independent electricity producers had dormant licences which are soon to become a reality.”
“Another new reality is the creation of gas-powered generation plants which are now coming to Cyprus. Renewable generation projects are planning to use gas turbines so that they can produce cheap electricity round the clock and not only when the sun is up during the day. This will make renewables even more viable, so in terms of the energy production we have a complete transformation.”
“We are already in the process of developing bunkering facilities, and we have a vision of Cyprus becoming a bunkering centre in the East Mediterranean. Cyprus is already a major stop for cruise liners and ships, so this would help tourism and drive the local economy.”
“Then you have the development of industry. Any development that takes place in Cyprus, which is a Member State of the European Union, does have EU status. We see already companies being set up here, not just for the import of gas, but for exploration and production, a lot of service companies have been set up to service the East Mediterranean.”
There is a possibility of building a gas liquefaction plant in Cyprus, Kassianides added, and this would also benefit the island’s economy.
The Cyprus project to build an LNG terminal is already underway, he continued. “The fact that the European Investment Bank is helping to finance this project is not only important for financial reasons,” Kassianides insisted, “but it also shows the clear benefit of this project to energy transition in Cyprus.”
Kassianides also explained the plan for the extraction and monetisation of the reserves of the Aphrodite gas field, located in the Cyprus Exclusive Economic Zone.
“Aphrodite will not begin producing gas until 2025. The plan is to bring the gas to Egypt via pipeline and to liquefy it at the terminal there.” This plan has been approved by the Cyprus government, he noted.
There will be considerable exploration and extraction expanding over the next few years, and this will change the economics of gas production and export, he said. “Ten years ago, the East Med pipeline would not have been technically feasible. Today, it’s a reality. In five years’ time, technical problems which trouble us now may be solved – there is bound to be much technical progress. We have to try to plan for the monetisation of these resources in five-to-six years’ time, what the demand will be in the region and in Europe at that time.”
For now, Kassianides said, regional collaboration is the real game changer. “We have Israel exporting to Egypt, Jordan and the Palestinian territories, and Cyprus exporting to Egypt, and Lebanon and Israel in talks about gas resources. The East Mediterranean Gas Forum will drive prosperity and lasting peace in the region, and this is what we need in our part of the world.”
