THE PROCEDURE to select a natural gas supplier is expected to be wrapped up in six months time, a senior official said yesterday.
The latest round of discussions between three short-listed companies and DEFA – owned by the Electricity Authority of Cyprus – the island’s natural gas corporation, kicked off yesterday.
A preliminary agreement with one of the bidders expected to be reached inside of September.
DEFA chairman, Costas Ioannou said a series of meetings was held yesterday while further steps will be decided immediately after this round of talks.
“It is a procedure of continuous bids,” Ioannou said. “Every time we set a date and the companies come back with bids.”
The DEFA chairman said he did not yet know the last day for the submission of the final proposals.
“These agreements are complicated with many discussions and clarifications needed regarding the two sides’ positions,” he said.
Ioannou said the current procedure is expected to finish in September.
“There will be a preliminary agreement followed by a more in in-depth discussion of the details to arrive to an agreement in around six months,” Ioannou said.
The agreement will be for 20 years.
Cyprus has opted for the liquefied form of the gas, which will be processed at a re-gasification facility, estimated to cost some €800 million.
The year 2014 has been quoted as the official ETA for the mammoth facility.
Some have expressed concerns about the government plans.
Former commerce minister Antonis Michaelides warned that the LNG/land terminal option could be disastrous for the economy.
The cost of the investment in a land terminal would be huge and it would limit our options to LNG which might not be the cheapest alternative.
Michaelides said Cyprus should have invited tenders from abroad requesting the supply of natural gas directly to EAC’s power stations.
Opposition DISY deputy leader Averof Neophytou has in the past questioned the logic of awarding the successful company a 20-year, supply contract.
Neophytou suggested Cyprus could have its own natural gas supply in a few years – significant quantities have been discovered not far in Israeli waters – but even if that fails in ten years’ time there could be cheaper alternatives to LNG, such as compressed natural gas (CNG).
