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Energy Minister spoke about new form of East Med, half of which will be floating

Νεο πλανο για ΦΑ με στoχο τον φτηνo ηλεκτρισμo και τις εξ αγωγe&sigmaf?

The floating gasification unit is expected to be delivered to the Republic of Cyprus in July 2023. File photo.

The government's immediate plans for low-cost electricity in Cyprus include the pipeline of natural gas, either from the Cypriot EEZ or the Israeli EEZ, to the gas dewatering terminal at Vassiliko, which is estimated to be ready in the first quarter of 2024. For this purpose, these days the Ministry of Energy is drawing up letters of invitation to multinational natural gas companies, from those that install pipelines to those that sell natural gas on the markets, in order to present them next May in Cyprus with an alternative solution for utilizing the natural gas reserves in the “Aphrodite” field, which is considered the most mature in terms of exploitation, but also others in the EEZ of the Eastern Mediterranean. For the government, a natural gas pipeline to Vasilikos and then the liquefaction – sending the gas by ships to Europe can become the new form of the much-discussed East Med project.

The above was analyzed at length on Thursday night on state television and on Andrea Kimitri's show, by Energy Minister Giorgos Papanastasiou, showing a “second path” for the utilization of “Aphrodite”, which is not the long-discussed pipeline to the terminals stations in Egypt -“it cannot be a decision made, for the reason that it must also be explained in techno-economic terms”, he characteristically said-, but the pipeline of natural gas to Cyprus.

The government plans to lease the floating natural gas gasification unit (ship) to a European country, until the completion of the terminal in Vassiliko.

As he explained, they will put before the companies the solution of natural gas coming to Cyprus , either from the Cypriot deposits or from other fields in the region, because, he emphasized, interest was expressed by companies located in the EEZ of Israel, among which the Greek interests Energean, to channel natural gas at the prices of the Eastern Mediterranean and not at those of the Europe which are higher due to increased demand, to Cyprus – for two purposes:

  1. For electricity generation that will reduce the cost of electricity to the consumer, through the dehydration plant that will be ready in the first quarter of 2024.
  1. For liquefaction of natural gas at another small terminal, for export purposes mainly to European markets. “Because Cyprus is a very small market for natural gas, the power generation should work in parallel with the liquefaction and export terminal, so that these investments can be justified”, stressed the minister.

Νεο πλανο για ΦΑ με στoχο τον φτηνo ηλεκτρ&iota ;σμo και τις εξαγωγeς

The Minister of Energy Giorgos Papanastasiou clarified that a decision has not been made to channel the natural gas from the “Aphrodite” field to Egypt, but there is an alternative solution that the government will present to multinational companies in May in Cyprus. >

In the second half of 2024, electricity generation from natural gas

The implementation of the first objective is linked to the construction of the natural gas dewatering terminal in Vassiliko, which, according to the minister, is expected to be completed in the first quarter of 2024. As he clarified, the station will consist of the floating natural gas gasification unit (vessel) and a land part, which includes the pier for the floating unit to moor. The ship is expected to be delivered to the Republic of Cyprus in July 2023, while the onshore part is estimated to be completed by the Chinese consortium in the second quarter of 2024. However, because EAC, which is currently the only organization ready to start the power generation with natural gas will take some time to organize the generators to burn natural gas and not fuel oil, power generation in Cyprus from natural gas is estimated to start in the second half of 2024. Here Mr. Papanastasiou clarified that it is an imported and expensive – due to demand at this time – natural gas, which the Republic of Cyprus will buy from the international markets, at the prices that Europe buys. However, he expressed the assessment that, even if expensive, natural gas will bring about a slight reduction in the price of electricity for the final consumer of Cyprus, given that pollutants will be reduced.

Plans to rent the floating unit in a European country

As he revealed, because the natural gas gasification ship of the Republic of Cyprus will be ready next July, while the electricity generation from natural gas in the second half of 2024, the government is considering the possibility – after securing the concurrence of the European Commission which financed it with 101 million euros the project – to be transferred to another European country and until Cyprus needs it to rent it for a fee. He explained that these vessels are currently in high demand in Europe, where many terminals are currently being built, but the construction companies are unable to make them available immediately. According to Mr. Papanastasiou, such a ship is rented for around 300,000 – 400,000 dollars per day, speaking of a serious income, which can cover the additional costs, resulting from delays in the delivery of the terminal.

Νεο πλανο για ΦΑ μ ε στoχο τον φτηνo ηλεκτρισμo και τις εξαγωγeς

The three milestones for the “Aphrodite” deposit

Regarding the channeling of Cypriot natural gas to Vasiliko, and specifically to the “Aphrodite” field, which is considered the most ripe for exploitation and is considered a medium field (4.2 tcf) among the sizes found in the world, the Minister of Energy spoke about some milestones in the Republic of Cyprus' agreement with the management company Chevron, which the government expects to meet. The first is the second confirmatory drilling, which, as announced, will take place within the next few days. The second is until Niovris for the company to present the development plan of the field to the KD, and after a few months the third, which is the presentation of the final investment decision, and it is at this milestone that Chevron to assess, in consultation with the Republic of Cyprus, where the “Aphrodite” natural gas will be piped. At this point, the minister made it clear that the pipeline of “Venus” natural gas to Egypt has not been decided, but there is the government's alternative solution which, as we mentioned above, will be presented to multinational companies next May in Cyprus. “Our goal is cheap electricity for Cyprus. And since Cyprus is a very small market for natural gas, the power generation should work in parallel with the liquefaction and export terminal, so that these investments can be justified,” he stressed.

Νεο πλανο για ΦΑ μ ε στoχο τον φτηνo ηλεκτρισμo και τις εξαγωγeς

Differentiation from Christodoulidis pre-election program

The above described by the Minister of Energy, i.e. a broader plan that also includes the liquefaction of natural gas, differs from the pre-election program of President Christodoulides, which was limited to a small pipeline from Cypriot deposits to Cyprus. Mr. Papanastasiou agreed to this, stressing that the government commissioned the liquefaction station to give investors the opportunity to recoup their investments in a shorter period of time. “And why are we in such a hurry to pay off these investments? Because we are a European state and because the EU set the green policy, which has an expiration date, any investments made should be repaid and have an economic benefit within the time remaining until the expiration time, as set by the European Green Policy , i.e. around 2035 – 2040”, he said.

“The East Med pipeline in a different way”

What now for the East Med pipeline? For the government, the pipeline to Vasilikos and the liquefaction – shipping of natural gas by ships to Europe, which he described above, may be the new form of the much-discussed project. “The Israel-Cyprus-Greece corridor can be done in two ways: A natural pipeline – a pipe or a half-pipeline, that will come to Cyprus and then, after the liquefaction of the FA, the ships will go to those markets that will go the pipeline – pipe. East Med is a corridor that would supply natural gas from the Eastern Mediterranean to Europe. Now it's just done in a different way,” said Mr. Papanastasiou.

Source: www.kathimerini.com.cy

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