Cyprus opens LNG supply tender to 2018
Cyprus's state-owned Natural Gas Public Company (DEFA) has invited LNG suppliers to submit expressions of interest to supply the East Mediterranean island with up to 1.2bn cubic metres (Gm³)/year of natural gas (0.9 million tonnes per annum, tpa, of LNG) until the end of September 2018.
"The exact quantities will depend on the gas price and the time of first delivery and the subsequent availability of indigenous gas," according to DEFA's call to tender, which closes on 29 October.
With an estimated 7 trillion cubic feet of natural gas discovered late last year, according to US-based exploration and production company Noble Energy, Cyprus has enough gas reserves to meet its own domestic demand and even support an export project. The government appears committed to switch from oil-fired power generation to gas-fired "at the earliest opportunity". While negotiating the commercial terms of its own offshore gas development, it is also reviving a long-running desire to import either LNG or compressed natural gas (CNG) on an interim basis.
At present, Cyprus is heavily dependent on imported oil products. The state-owned monopoly, Electricity Authority of Cyprus, uses heavy fuel oil and gasoil at all three of its thermal power stations, which together have a nameplate capacity of 1.60GW.
By switching to gas-fired power generation, DEFA expects total gas demand to be 0.4, 1, or 1.2 Gm³/year, depending on the number of gas-fired units put online. The entry point for natural gas into Cyprus would be the Vasilikos power station on the south coast of the island, according to the DEFA document. "All necessary conversions to burn natural gas [at Vasilikos} can be completed with 18 months' notice," the document continues.
As well as being the landing point for domestic gas and a possible liquefaction terminal, Vasilikos was also used in DEFA's previous plans for a land-based regasification terminal. This time round, the LNG would be brought into a floating receiving point and regasified offshore. Whether that would be done via a floating storage regasification unit or a regasification vessel with onshore storage is still undecided.
DEFA's earlier call for long-term LNG supply before significant gas discoveries saw bids from Anglo-Dutch major Shell and Greek monopoly gas incumbent DEPA. Shell went on to sign a preliminary agreement to supply Cyprus with 770,000tpa over the then proposed 20-year period from 2014 (see GLM 13 January 2011).
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