Page 15 - GLNG Week 09 2023

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Cyprus FSRU project makes late start

CYPRUS CONTRACTORS for a project designed to The consortium has cited the Covid-19 pan-
bring LNG to Cyprus through the installation of demic and supply chain issues as the primary
The project was a floating storage and regasification unit (FSRU) reason for the delay. Last year, when local media
originally due online in at the industrial port of Vasilikos on the island’s began to report that no work had taken place at
late 2022. southern coast have started construction on a the project site at Vasilikos, the consortium sought
jetty to which the FSRU will be moored. a new timetable agreement with the government.
Work on the initial infrastructure for the pro- The government has refused the new timetable
ject began in late February following a number and will likely put the matter to some form of
of delays, which will likely set the operation date contract dispute resolution. The government has,
back by a year to October 2023. A consortium however, agreed to the consortium’s request to
led by state-owned China Petroleum Pipeline raise the value of the contract by €25mn.
Engineering Company (CPP) was awarded a At €289mn, the terminal is the largest energy
contract worth €289mn in 2019, with an agree- project Cyprus has ever seen. Auxiliary costs
ment that the facility would be operational by put the total estimate at close to €300mn. Finan-
October 2022. Partnered with CPP, a subsidi- cial support for the project and the purchase of
ary of the China National Petroleum Corpora- LNG is coming from the European Union, with
tion (CNPC), is Metron Energy Applications, €101mn from the Connecting Europe Facility.
Hudong-Zhongua Shipbuilding and Wilhelm- The EAC has invested €43mn, while the Euro-
sen Ship Management. pean Investment Bank (EIB) will lend €150mn
The Cypriot government will own the LNG and the European Bank for Reconstruction and
terminal through ETYFA, a subsidiary of the Development (EBRD) will provide €80mn. With
Natural Gas Public Company (DEFA), which the increase in the value of the contract, the cost
will supply gas to the Electricity Authority of of the facility is estimated at €315mn.
Cyprus (EAC), which is the main source of The FSRU itself is being converted by Cosco
power supply on the island. The power plant cur- Shipping Heavy Industry in Shanghai. The
rently burns heavy diesel and is reported to have 135bn cubic metre vessel was built in 2002 and
installed or be installing six gas-fired generation originally named Galea, but is now registered
units. The project’s delay is particularly frustrat- in Cyprus as the Etyfa Prometheus. Conversion
ing for Cyprus, as it has been through numerous work is expected to finish in March and com-
tenders and negotiations with previous efforts to missioning begin in spring. The vessel is due to
install an LNG receiving terminal. Furthermore, arrive in Cyprus mid-summer.
several gas reservoirs have been discovered in the Vasilikos is already the site of a large products
Cyprus offshore that have not been developed and storage terminal managed by VTTI. The arrival of
of which the operators claim would be too expensive LNG on the island is expected to give rise to inde-
to develop and deliver gas by pipeline to the island. pendent power producers (IPPs) on the island. Sev-
In the meantime, electricity consumers on the island eral companies have already been granted licences
continue to face high power costs. to build power stations and sell electricity. ™

Week 09 03•March•2023 www. NEWSBASE .com P15