Local
articles | 05 February 2013

Cyprus receives eight proposals for natural gas supply

The Natural Gas Public Company (DEFA) has received eight proposals from companies interested in supplying the island with natural gas.

Cyprus is seeking to secure a short-term supplier of natural gas not exceeding 1.2 billion cubic metres per year as a stop-gap solution until it can bring ashore its own natural gas. Under the terms of the call for expression of interest, the supply of gas should begin no later than early 2015 and up until September 2018, when Cyprus should be able to start using its own resources from the natural gas discovery in its Exclusive Economic Zone (EEZ).

DEFA initially received 17 expressions of interest, of which 14 companies meeting the minimum criteria were shortlisted. In January of this year, DEFA sent these 14 companies tender documents in a bid to receive binding proposals by the February 4 deadline.

When considering the submitted proposals, the natural gas company is also looking for a turn-key solution to build the necessary infrastructure for the use of the gas. In terms of technology the tender is open-ended: liquefied natural gas (LNG), compressed natural gas (CNG), or any other technology. The top criteria are time and cost and DEFA has reserved the right not to finalise any deal if the price of electricity generated by natural gas will be higher than that currently produced from diesel. The aim is to find a sustainable solution to bring down the electricity prices in Cyprus, which are currently one of the highest in Europe. DEFA’s negotiations leading to the final selection of a natural gas supplier are expected to take some weeks and details of the bids are bound by a confidentiality agreement.

Commerce Minister Neoklis Sylikiotis has also commented that the approximate date by which the island should generate power from natural gas is January 2015, this estimate is to allow time for the completion of the necessary receiving infrastructures.

The Electricity Authority of Cyprus (EAC), which will be DEFA’s first and only customer to begin with, has also undertaken to start electricity production from natural gas by 2015, as a condition for qualifying for a €130m loan from the European Investment Bank (EIB).

 

 

Cyprus is seeking to secure a short-term supplier of natural gas not exceeding 1.2 billion cubic metres per year as a stop-gap solution until it can bring ashore its own natural gas. Under the terms of the call for expression of interest, the supply of gas should begin no later than early 2015 and up until September 2018, when Cyprus should be able to start using its own resources from the natural gas discovery in its Exclusive Economic Zone (EEZ).

DEFA initially received 17 expressions of interest, of which 14 companies meeting the minimum criteria were shortlisted. In January of this year, DEFA sent these 14 companies tender documents in a bid to receive binding proposals by the February 4 deadline.

When considering the submitted proposals, the natural gas company is also looking for a turn-key solution to build the necessary infrastructure for the use of the gas. In terms of technology the tender is open-ended: liquefied natural gas (LNG), compressed natural gas (CNG), or any other technology. The top criteria are time and cost and DEFA has reserved the right not to finalise any deal if the price of electricity generated by natural gas will be higher than that currently produced from diesel. The aim is to find a sustainable solution to bring down the electricity prices in Cyprus, which are currently one of the highest in Europe. DEFA’s negotiations leading to the final selection of a natural gas supplier are expected to take some weeks and details of the bids are bound by a confidentiality agreement.

Commerce Minister Neoklis Sylikiotis has also commented that the approximate date by which the island should generate power from natural gas is January 2015, this estimate is to allow time for the completion of the necessary receiving infrastructures.

The Electricity Authority of Cyprus (EAC), which will be DEFA’s first and only customer to begin with, has also undertaken to start electricity production from natural gas by 2015, as a condition for qualifying for a €130m loan from the European Investment Bank (EIB).

 

 

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