The government is “in talks with energy giants” over the allocation of the rights to research and drill for natural gas in blocks of Cyprus’ exclusive economic zone (EEZ) which remain unreserved, President Nikos Christodoulides said on Friday.
“In addition to the blocks which have been allocated, we are in talks with energy giants for the allocation of other blocks, so that the eastern Mediterranean, with the cooperation with Egypt and Israel, the Republic of Cyprus and possibly other countries in our region, can create an alternative energy corridor for Europe,” he said.
He then stressed that “Europe’s energy security, the energy security of the [European Union’s] member states, is a matter of the highest priority”, before adding that the salience of alternative sources of energy has become more salient in recent years following Russia’s invasion of Ukraine and the efforts made by European nations to become less reliant on Russian gas.
On this front, he said that the Cypriot government is “working on a specific plan and design”, and that as part of this, he aims to “complete the arrival of natural gas” at the planned natural gas liquefaction terminal in Vasiliko.
“This is something that is very important. The tenders have been issued. The process is progressing,” he said.
Efforts to build a liquefaction terminal in Vasiliko have been stalled for more than two years, with the China Petroleum Pipeline Engineering Co consortium and Metron Energy Applications SA, which together formed the CPP-Metron Consortium (CMC), having torn up their contract with the government for its construction in July 2024.
CMC had accused public natural gas infrastructure company Etyfa of “bullying” and of leaving them to work “without proper or timely payments for years”, while a floating storage and regasification unit (FSRU), which was supposed to be brought to Cyprus for use, remained moored in Malaysia, without certification.
The FSRU had been one of the key points of contention between Etyfa and CMC, with CMC insisting that the vessel was ready in Shanghai and that Etyfa had “inexplicably refused to take delivery” of it while also frequently not meeting payment deadlines.
Also in July 2024, the European Commission demanded that the Republic of Cyprus repay almost €69 million which had been paid in grants for the terminal.
The energy ministry received a letter from the European Commission which listed “possible irregularities which occurred during the evaluation period of the tender” for the construction project.
The Republic of Cyprus signed the contract for the LNG project in December 2019. The entire project should have taken 22 months to complete.
In Cyprus’ EEZ, Italian energy company Eni and France’s Total jointly hold the rights to Blocks 6, 7, 8, and 11, while the rights to Block 12 are jointly owned by Hungarian firm MOL, American multinational corporation Chevron, and Israeli energy company NewMed Energy.
Eni and Korean energy company Kogas jointly held the rights to Blocks 2, 3, and 9 until last year, but their licences expired without renewal last year.
Energy minister of the day George Papanastasiou had said that in blocks 2 and 9, “surveys and exploration were completed”, but “nothing came up that would promise natural gas”.
