Gas storage tenders may come by year end

CYPRUS MAY open tenders by the end of this year for the storage of natural gas as it attempts to switch to cleaner forms of energy, Commerce and Industry Minister Antonis Michaelides said yesterday.

Michaelides said the island would explore through the tender process the establishment of gas storage facilities offshore, a stop-gap option for their longer-term goal of land facilities.

“We will have to appoint a consultant to draw up the [tender] specifications, I expect that to occur in about eight months, the end of the year,” Michaelides said.

Cyprus relies on heavy fuel oil firing its power grids but must start introducing renewables to its energy mix under European Union obligations.

Solar energy represents 4.0 per cent of the island’s energy balance but the total contribution of renewables must be raised to 9.0 per cent by 2010.

A ministerial advisory committee has recommended the establishment of onshore Liquefied Natural Gas (LNG) facilities, a venture which could take up to seven years to get off the ground.

Cyprus will also look at the option of offshore storage which could get gas supplies in quicker.

The state has been involved in a very public spat with the key electricity utility, EAC, over the offshore storage unit option. The EAC is against a floating storage unit, arguing that the technology is untested and could result in wastage of taxpayers’ money.

Authorities say they are keeping their options open, committed to a land storage facility in the long run but in the short term compelled to also look at offshore units.

“It will be a balanced approach which will be beneficial to both the EAC and the consumer,” Michaelides said.

The Cabinet is expected to discuss supply proposals on June 6. (R)
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