Cyprus has received approval for preliminary EU funding amounting to €101m to build the necessary infrastructure enabling the country to import Liquefied Natural Gas (LNG) for power generation.
The announcement was made on Wednesday by Cypriot Energy Minister Giorgos Lakkotrypis, who said that the approved amount is approximately 40% of the estimated cost.
EU approval came as a response to a joint proposal by the Cypriot Ministries of Energy and Transport to EU funding instrument Connecting Europe Facility (CEF). Cyprus has sought aid in LNG imports so that the country can reduce its reliance on oil imports for producing electricity prior to its own natural gas resources becoming available.
While the funding awaits the approval of the other member states, Mr Lakkotrypis said that this “is a decisive step towards the import of LNG for power generation”.
Mr Lakkotrypis expressed his hopes that the current attempt of LNG import will be successful, while he attributed the failure of previous attempts to construct the abovementioned infrastructure to the high costs involved as well as to low demand for gas imports. As a result, gas prices were too high for the whole process to be cost-effective.
As CNA reports, the Natural Gas Public Company (DEFA) has already launched procedures to recruit consultants for the supply of LNG.
Lakkotrypis told reporters 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 has been assigned the task of reaching an agreement with a supplier for the so-called ‘interim solution,’ whereby oil will be replaced with gas at a lower cost as fuel for generating electricity by the state power company (EAC).