Cyprus is considering abolishing the monopoly of its state-owned natural gas company DEFA and opening the market to private companies and the Electricity Authority of Cyprus (EAC), in a bid to overcome obstacles surrounding the Vasilikos terminal project.
The Ministry of Energy has asked the Cyprus Energy Regulatory Authority (CERA) to consider ending the emerging market and regulating it through the participation of natural gas suppliers.
If approved, this move could alter market dynamics, potentially allowing the EAC, currently the largest oil consumer, to become the dominant natural gas importer. This could give the EAC an advantage in securing cheaper fuel compared to smaller producers.
The fate of existing infrastructure, including a natural gas ship and jetty at Vasilikos, which have cost the state tens of millions of euros, remains unclear.
The ministry is also exploring the implementation of a model similar to Germany’s, which rapidly established multiple natural gas terminals following the cessation of Russian gas imports.
Energy Minister George Papanastasiou expressed support for market liberalisation during a parliamentary committee meeting.
Giorgos Chrysochos, CEO of Power Energy Cyprus, revealed his company had investigated renting a floating LNG terminal for €30 million per year, suggesting potential savings compared to current fuel costs.
A critical arbitration decision regarding the Vasilikos terminal is expected on 4 September in the UK, concerning the ‘Promitheas’ ship held by the Chinese consortium CMC.
EAC Chairman Giorgos Petrou urged caution in discussing the matter ahead of this crucial court decision.
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