It is important for Cyprus to develop both the infrastructure for power generation and an outlet for natural gas exports to international markets, said the Minister of Energy, Commerce and Industry George Papanastasiou on Friday, addressing the 14th Limassol Economic Forum.

Starting with developments in Cyprus’ Exclusive Economic Zone, the Energy Minister said in his intervention that there are currently conversations with Chevron on the “Aphrodite” field in order to proceed with the development and production plans, while on “Glafkos”, he said that Exxon Mobil prefers to make an announcement following the completion of the appraisal currently underway and the confirmation of existing gas quantities.

“There are quite some natural gas discoveries in Cyprus’ EEZ, however what is missing is infrastructure and this is our major disadvantage,” continued Papanastasiou and added that Israel has the infrastructure that gets natural gas to the country for power generation purposes, while some of the gas coming from the "Leviathan" field finds its way to Egypt and is then being liquified and exported to the international markets, including the internal market of Egypt for power generation. He added that Egypt, the first country that developed infrastructure in the East Med, has two liquefaction plants that the region can use to liquify natural gas and export it to the markets.

Going forward, the government of Cyprus will be in conversations to develop infrastructure in its EEZ, said the Energy Minister, adding that there are currently conversations to get infrastructure connecting “Aphrodite” with Egypt, with part of the product going to the local market and the majority being liquified and exported to the European markets.

Papanastasiou said that another conversation concerns the connection of this infrastructure with Cyprus through a pipeline that will import gas either from the quantities that have been discovered in the EEZ of Israel and/or the connection to discoveries in Cyprus’ EEZ.

He noted that to be able to justify the investments required to connect Cyprus with existing infrastructure in neighbouring countries, an outlet to the international markets needs to be developed and not only to the local market, which is a niche market requiring only 0.7 bcf of natural gas per annum. “It is important that we develop both, infrastructure that will get the product into our conventional power generation and at the same time we need an outlet to liquify the gas and export it to international markets”, he stressed.

According to the Energy Minister, Cyprus is considering a floating liquefaction system which will allow for natural gas exports via LNG carriers or an offshore LNG, for which the modular technology could be applied, meaning the more gas is available for export, the more modules can be added to increase the facility’s capacity, providing the same flexibility as in a FLNG solution. He added that a floating supply regasification unit is estimated to arrive in Cyprus in the next month, a different way of pushing gas into the local system for power generation in Cyprus.

On the issue of lowering electricity prices in the country, he said that renewable energy sources, such as solar and wind, are needed in a much greater scale.

“The wind dynamic in Cyprus is not on the high side, but Cyprus is considered one of the best places to convert solar energy into electricity and this is reflected in investors’ interest to place photovoltaic farms in the country”, he underlined.

The Minister added that due to the island’s isolation, ways to forward surplus generated power elsewhere need to be found and in this context electricity interconnections with Israel and Greece are being discussed, providing both energy supply security and the possibility to export excessive energy to the neighbouring countries.

Regarding Greece, he said the EuroAsia Interconnector is being discussed again, a project of common interest for the EU and of significant geostrategic value, as through the connection of Cyprus with mainland Greece the grid of Cyprus is connected to that of Europe.

He added that the government has decided for an assessment to evaluate this interconnection and see how feasible it is and that the European Commission’s opinion is that it should go ahead and is providing 757 million euro in this direction, out of a total cost of 1.9 billion euro, with a projected completion date by 2029.