Energy Minister Giorgos Lakkotrypis: funding 'a decisive step towards the import of LNG for power generation'
Cyprus has been approved for preliminary EU funding of €101m to construct infrastructure for the import of liquefied natural gas (LNG) for power generation, Energy Minister Giorgos Lakkotrypis said on Wednesday.
The approval is a response to Cyprus’ application seeking assistance in importing LNG to decrease the island’s reliance on imported oil for producing electricity ahead of the extraction of its own gas.
The approved amount, Lakkotrypis said, is around 40 per cent of the estimated cost.
The proposal, he said, was jointly submitted to key EU funding instrument Connecting Europe Facility (CEF), by the energy and transport ministries.
The amount is pending the approval of the other member states.
The preliminary approval of the €101m, Lakkotrypis said, “is a decisive step towards the import of LNG for power generation”.
The minister said that one of the reasons attempts to build such facilities failed in the past was because the infrastructure costs were too high in relation to the small amount of gas Cyprus needed to import.
“This has resulted in the price being elevated to a point where it was not cost effective,” Lakkotrypis.
He said he hoped that the current attempt proves successful.
The Natural Gas Public Company (Defa) has already launched procedures to hire consultants for the supply of LNG.
Lakkotrypis said that he has a scheduled meeting with both Defa and the energy regulatory authority (Cera), to discuss the issue of import of natural gas.
Defa is tasked with reaching agreement with a supplier for the so-called ‘interim solution’ to replace oil as the state power company’s (EAC) electricity-generation fuel with imported gas at a lower cost.
The so-called interim solution calls for the importation of natural gas to facilitate cheaper power production as a stopgap until local resources become available.
