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CYPRUS’ LNG IMPORT PROJECT AND NG MARKET FORMATION
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1. Introduction
1. Current Energy Market Conditions
2. CYGAS LNG Supply Options Study
3. CEF Synergy – “CYnergy” Project
4. CEF Energy Call 2017
2. 2017 CEF Energy Proposal
1. Proposal Preparation
2. Infrastructure Layout
3. Project Maturity – Licensing & Financing
3. EU (INEA) Decision For Funding
4. Cyprus LNG Import Terminal
5. Way Forward
6. Other NG Projects
CYPRUS LNG IMPORT PROJECT – CYPRUSGAS2EU
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1. INTRODUCTION – CURRENT MARKET CONDITIONS
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High Degree
of Dependence
on Imported
Oil
Monopoly in
Electricity
Market
Seasonality
on Energy
Demand
No electricity
storage
infrastructure
3 Conv. Power
Stations Owned
by EAC
Total 1478MW
Significant
RES Potential
Isolated System
No interconnections
Cyprus
Energy
System
Natural Gas
is not available
yet
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1. INTRODUCTION - CURRENT MARKET CONDITIONS
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Gas Market – Legal / Regulatory Framework
• Cyprus Law - Harmonised with EU Directive 2009/73/EC
• Derogations may apply due to Isolation & Emergent
Market
• Possible monopolistic operation for NG supply and LNG Terminal
for certain period of time
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1. INTRODUCTION - CYGAS’s LNG Supply Options Study
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– CERA analysed and compared all options to introduce NG in
CY
– CYGAS analysed and compared all options for LNG Supply
– Optimum way forward (accounting for cost, time, flexibility)
is through floating storage and regas facilities
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– Holistic Approach for NG Market development and penetration of
use of NG to Energy and Transport sectors
– CEF Synergy Call: Synergies between Energy and Transport
Sector
– Total Proposal Cost ≈€7,5m – CEF EU Co-financing ≈€4,5m
(60%)
– Implementation of CYnergy proposal is aligned with NG supply
target date by 2020
– All CYnergy resources have been used for the successful
submission of the CEF Energy Proposal for Infrastructure
Development of the Cyprus LNG Import Terminal
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1. INTRODUCTION - CEF SYNERGY – “CYNERGY” PROJECT
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Proposal Preparation
– CYGAS, MECIT, MTCW and CPA with the assistance of all
available CYnergy resources prioritised all work towards the
completion of the CEF Energy proposal requirements (5 months
window)
– The successful exemplary collaboration and coordination of all
relevant stakeholders set a precedent for the future development of
the Energy Sector in Cyprus
– Intergovernmental committees were established facilitating the
preparation of all required studies and licensing
– Meetings in Cyprus and Greece with PCI Competent Authority,
RAE, DESFA and DEPA were held for the crucial, to the proposal, CBA
and CBCA studies preparation and approval of the Project
2. 2017 CEF ENERGY PROPOSAL – “CYPRUS LNG IMPORT TERMINAL”
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Objectives/Benefits
promote market integration, by lifting the isolation of
Cyprus
ensure security of supply, by establishing appropriate
connections and diversification of supply sources with other EU
member states (e.g. Greece)
promote competition, especially in the electricity sector by
diversifying and complementing the supply sources
promote sustainability by reducing emissions and supporting
intermittent renewable generation
path the way for a cleaner economy by promoting NG/LNG as an
alternative fuel
enable Cyprus exploit it geographical position by offering
bunkering services to ships.
2. 2017 CEF ENERGY PROPOSAL – “CYPRUS LNG IMPORT TERMINAL”
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2. 2017 CEF ENERGY PROPOSAL – “CYPRUSGAS2EU”
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Infrastructure General Layout
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2. 2017 CEF ENERGY PROPOSAL – “CYPRUSGAS2EU”
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Project Maturity – Licensing & Financing
– Environmental Licensing (ahead of CEF Energy proposal
submission)
– License for works in the marine area of the Vassilikos Bay, by
CPA
– Consultation with all Cypriot Operating Financial
Institutions
• 10 LoIs have been received
– Consultation and meetings with EIB (prior the proposal and
ongoing)
• LoI has been provided to include with submission
• An NDA has been signed aiming to cover all future
deliberations and data exchanges re financing of the Project
– Electricity Authority of Cyprus (EAC) participation in the
infrastructure SPV, up to 30%
• EAC provided a LoI
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3. EU (INEA) DECISION
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– Award decision: End of January 2018
– CEF funding: 40% of total eligible cost, approximately
~€101m
– Signing of the Grant Agreement (GA): July 2018
– 1rst pre-financing payment : July 2018
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Decision of the Council of Ministers (May 2017) to split the
process of LNG supply in Cyprus into two different tendering
procedures: i. supply of LNG to be carried out by CyGAS ii.
infrastructure to import LNG to be carried out by a Special Purpose
Vehicle (SPV)
SPV has been established and properly registered as a private
company under Corporate Law, on August 2018
Name: Natural Gas Infrastructure Company («ΕΤΥΦΑ») For the
moment, CYGAS the sole owner Once CYGAS and EAC agree on the SHA,
EAC will own up to 30% shares
4. CYPRUS LNG IMPORT TERMINAL
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Infrastructure Description
1. FSRU (125,000m3 - 250,000m3 storage capacity)
2. Jetty, for the safely mooring of the FSRU
3. Jetty borne gas pipeline and Loading Arms
4. Onshore gas pipeline
5. Pipeline storage array (buffer) for security of supply
6. Pressure reduction and metering station
4. CYPRUS LNG IMPORT TERMINAL
Tender for the design, construction and operation of the
Terminal for up to 20 years
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5. WAY FORWARD
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Tasks Towards 2020 – First Gas
1. Infrastructure
– Announce of the infrastructure tender: 5 October 2018
– Site Visit and Consultation Meeting Dates: 6 – 8 Nov (tbc)
– Tender Document Clarification Deadline: 16 November 2018
– Submission of proposals: 21 Jan. 2019
– Award: Q1 2019
– Completion of the Terminal: November 2020
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5. WAY FORWARD
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2. LNG Supply
– Open Season Process for the determination of demand by all
users, committed quantities of NG and spatial allocation of users:
Q4 2018
– Request for expressions of interest for the supply of LNG: Q4
2018
– Full tender: After the award for infrastructure
3. Legal / Regulatory Framework
– Continuous work under CYnergy Project to facilitate the
development of all possible NG demand sectors (completion early
2020)
– Continuous work by MECIT-CERA-CyGas for finalisation of Legal
and Regulatory Framework
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6. OTHER NG PROJECTS
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NG Pipeline Network: – €10m. Grant EU Co-Financed under EEPR
– CyGAS appointed GNFe for Engineering Consultancy Services for
the NG Pipeline Network Development in 2010
– Feasibility Study completed in 2012
• Revised in 2017
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6. OTHER NG PROJECTS
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NG Pipeline Network: – Phase A’ – Power Gen
– Route Selection
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6. OTHER NG PROJECTS
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NG Pipeline Network: – Route: Selected trying to
minimise impact and avoiding all environmental/social/other
constraints
– Indicative example: follows highway passing through town
planning zones (avoiding housing/touristic zones, etc.)
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6. OTHER NG PROJECTS
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Other Projects Under Consideration and Study:
– LNG Bunkering
• The new LNG facilities will be able to accommodate demand
– NG to Industrial and Urban Sectors
• Under CYnergy Project Scope
– NG for Road Transport
• Under CYnergy Project Scope
– LNG & NG to Remote Locations
• Under CYnergy Project Scope
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Thank You! Questions?
Dr. Stella Hadjiyiannacou DIRECTOR, BOD NATURAL GAS PUBLIC
COMPANY (DEFA)
13 Limassol Avenue, Demetra Tower, 4th Floor 2112 Nicosia -
CYPRUS Tel: +357 22 761 761, Fax: +357 22 761 771
[email protected], [email protected]
mailto:[email protected]
