According to sources, Cyprus is considering ending its gas import monopoly to avoid project delays
NICOSIA, August 29 (Reuters) – Several industry sources told Reuters that Cyprus wants to end the state monopoly on natural gas imports in order to quickly find a solution to significant project delays in bringing the raw material to market.
Efforts to introduce natural gas to the local market have been plagued by delays for years, with the latest setback being a legal dispute between Cyprus and a Chinese consortium over a half-finished liquefied natural gas (LNG) import terminal.
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Although Cyprus discovered gas on its own offshore in 2011, it currently uses mainly heavy oil to generate electricity. 77 percent of the energy is produced by the state-controlled Electricity Authority of Cyprus (EAC).
Cypriot Energy Minister George Papanastasiou has asked regulators to consider abolishing the market’s current protected status and discuss what legal arrangements might be needed. said industry sources.
This step would eliminate the monopoly of the state-run Cypriot natural gas company DEFA, founded in 2008, and reduce electricity costs for consumers.
“The abolition of this status would allow the EAC to look for other sources and solutions for the introduction of natural gas,” EAC Chairman George Petrou said on state radio.
The island’s plans to import natural gas via a terminal in the Vassilikos region on the south coast failed earlier this year amid a legal dispute between the Chinese consortium and the Cypriot state authorities and an upcoming arbitration case in London.
This week, the Cypriot Energy Ministry also sent a “notice of non-compliance” to a Chevron-led consortium over delays in developing the 3.5 trillion cubic foot Aphrodite field offshore Cyprus.
The consortium, which also includes Israel’s NewMed Energy, NWMDp.TA and a local Shell subsidiary responded on Monday that it would submit an updated development plan “within a few days”.
Papanastasiou met with Egyptian Oil Minister Karim Badawi on Thursday. The focus of the talks was on deepening partnerships.
These included talks on “creating a reliable energy corridor to Europe and accelerating the development of Cypriot gas by using infrastructure in Egypt,” he wrote in a post on X.
(Written by Michele Kambas; edited by Sharon Singleton)
