CYPRUS COULD have saved billions had an agreement to bring natural gas to the island been signed back in 2000, the Director of the island’s Energy Service said yesterday.
According to Solon Kassinis, the cost of importing natural gas to Cyprus was seven times less eight years ago, when the government Planning Bureau decided that natural gas was the way to go, expecting that by 2005 Cyprus would be importing another source of fuel other than petrol.
The price for natural gas is set for a specified number of years when a deal is signed and not at the time the import begins. Therefore, as the date for an agreement between a producer and Cyprus is pushed further back, the cost of importing natural gas to the Cypriot market will be higher, something that Kassinis says will come back to haunt the Cypriot consumer.
“If we had imported natural gas in 2000, according to studies in Syria, the cost would have been one seventh of what it is today and we are talking about many billions of euros lost by the state,” he said in an interview with Stockwatch website.
“It suffices to say that Israel signed a contract with Egypt four years ago to buy natural gas at $2.75 and today the price is above $10. As part of the agreement, Israel also decided that this price would remain constant for 10 years so they do not care if the price of fuel is increasing. In Israel, electricity is sold at 7 cents whereas Cypriot consumers have to pay 17 cents. This is as well as the fine that we will have to pay for pollution which is around €120 million. Therefore you understand what this country and the Cypriot consumer has lost out on. These are the crimes.”
According to information obtained by the Cyprus Mail, Cyprus was twice offered a deal by Egypt for the transfer of compressed natural gas to the island. The first offer was made in 2005 and was rejected by the Cypriot government, while the latest was made in December last year, with Egypt still awaiting a response from Cyprus.
In May, the government approved a proposal on plans to build a land-based natural gas terminal which is expected to be ready by 2014 and two weeks ago, Commerce Minister Antonis Paschalides confirmed that Cyprus would import liquefied natural gas (LNG) instead of compressed natural gas (CNG).
The LNG vs CNG debate re-surfaced this month after a group of experts on natural gas called on the government to re-think their decision, claiming that the import of liquefied natural gas to Cyprus made no sense at all. The group said the import of compressed natural gas would be more practical, cheaper, carried less environmental risks and would in general be much more beneficial to an island community the size of Cyprus.
During a debate organised by Sharelink Financial Services (SFS), experts roundly criticised the government’s handling of the natural gas issue, with Cypriot-born energy analyst Dr. Michael J Economides calling the idea of bringing LNG to Cyprus as “totally ridiculous”.
Kassinis hit back yesterday, saying that the government has conducted all the necessary research before taking a decision of such magnitude.
“The judgment was taken after research from a number of experts on liquefied natural gas and still some people are still discussing it. This phenomenon in Cyprus is disrespectful towards the state. It is not possible that for every government decision regarding large scale projects so many people are coming forward through experts, journalists or whoever else in a bid to promote their own ideas which are groundless. The government has studied the issue of natural gas thoroughly,” he said.
