Cyprus and a Chinese-led consortium have signed a 290-million-euro (322.7 million U.S. dollars) contract for the construction of the country’s first liquefied natural gas (LNG) terminal, the consortium announced.
The gas will be mainly used for electricity generation by the state-owned Electricity Authority of Cyprus,according to a statement issued by the consortuium.
The contract was signed by the Natural Gas Infrastructure Company (ETIFA), a subsidiary of the Natural Gas Public Company (DEFA), and the multinational consortium made up of JV China Petroleum Pipeline Engineering Co.,Ltd., Hudong-Zhonghua Shipbuilding Co., Ltd., Greece’s METRON S.A. and Norway’s Wilhelmsen Ship Management Ltd.
The LNG terminal will include a floating storage and regasification unit (FSRU) operated by the Norwegian company, a jetty for mooring the FSRU, a jetty-borne gas pipeline and related infrastructure.
DEFA has also launched an additional tender for LNG supply, attracting expressions of interest from 25 companies.
The statement said the project will be financed by a 101-million-euro grant from the European Union, with Cyprus Electricity Authority contributing 43 million euros. The rest of the construction cost will by borne by international lenders, such as the European Investment Bank and the European Bank for Reconstruction and Development.
The infrastructure’s operational expenditure has been estimated at 10.5 million euros per year.
Energy Minister Yiorgos Lakkotrypis, in a signing ceremony address, said that with the use of natural gas Cyprus’s environmental footprint will decline by 25 to 30 percent and electricity generation cost savings will range between 15 to 25 percent in the 2022-2025 period.
DEFA Chairman Symeon Kassianides said that the project is expected to be completed by the end of 2021 or in early 2022.
Duan Bingquan, deputy managing director of China Petroleum Pipeline Engineering, said it was a great honor for the corporation to partner with the consortium participants “for this significant project that ushers Cyprus in the natural gas era.”