A CONSORTIUM wanting to invest in an offshore floating unit to produce electricity is waiting for the government’s position regarding the importation, storage and distribution of gas.
In February 2006, the Cyprus Energy Regulatory Authority (CERA) granted the Norwegian consortium, Golar Energy, a licence to construct and operate the unit five kilometres offshore from the Vassiliko area.
The unit’s production capacity would reach 240MW, representing 30 per cent of the current production capacity of the Electricity Authority of Cyprus (EAC) and will be in a position to supply electricity to all Cypriot networks within 18-24 months.
The project is on a built-operate-ownership basis and covers the importation, storage and re-gasification of LNG.
However, Golar are claiming that they are being held back due to what they say is an unconstitutional law passed by Parliament last December.
This makes the EAC a monopsony – a buyer’s monopoly whereby only one company (DEFA – owned by the government and the EAC) will be entitled to buy LNG for the island’s needs.)
This had always been the demand of the EAC’s unions, which feared that the organisation’s monopolistic status would have been damaged if private companies were allowed to supply the island with LNG.
In response, the consortium has sent a letter to DEFA asking to be granted a supply of gas that they need to produce their electricity.
However, an unnamed source close to the issue told the Mail that, “whichever way they want to dress it, Golar will in all likelihood be refused a gas production licence which will in turn force them to take the case up with the European Union.”
Golar Director Frixos Savvides yesterday confirmed that the consortium had filed a letter with DEFA, requesting DEFA to supply them with gas, in order for them to produce electricity.
Commenting, CERA Chairman Costas Ioannou explained: “We gave Golar a licence to produce electricity via an offshore unit but they want to use their own LNG. By law, we are no longer permitted to issue a licence to anybody other than DEFA.”
He added that Golar’s only option now is to buy LNG from DEFA itself, but that DEFA is not in a position to supply them as the infrastructure is not in place and is not likely to be so for several years.
