THE ELECTRICITY Authority of Cyprus (EAC) yesterday decided to get on board with government plans for bringing Liquefied Natural Gas to the island.
Following a marathon session of its board of directors, the semi-governmental organisation voted in favour of participating in a majority state-owned corporation, which initially at least will be the sole supplier of natural gas.
The government aims to set up a Natural Gas Public Corporation (NGPC), which will handle the importation, processing and distribution of the fuel on a long-term basis.
The NGPC would be coupled to a land-based facility processing the fuel.
Though agreeing in principle, the EAC had been fiercely opposed to one aspect of government policy, namely, inviting tenders for a floating terminal, which would be operated by a private company, in line with EU directives on opening up the energy sector.
The state-run utility had warned it would not go along with the government’s scheme unless the idea of the floating unit was dropped.
Yesterday’s change of heart was apparently the result of government reassurances.
“We are very satisfied… the basic conditions we set have been met, and I’m glad to say we’re on a good footing,” EAC chairman Charilaos Stavrakis told newsmen.
“As such we shall participate in the NGPC, and we would even like a larger stake in the venture.”
The government has offered the EAC a 39 per cent in the corporation. 51 per cent would be owned by the state, and the remaining 10 per cent in private hands.
The three main conditions that were satisfied were: that the NGPC would be the sole supplier of natural gas; that natural gas would be made available via commercial agreement between states (e.g. Egypt); and that the corporation would not necessarily be linked to the construction of a floating terminal.
Additionally, said Stavrakis, the EU seems to have the given the green light to declare Cyprus an emergent, or protected, market as regards natural gas.
Asked whether they had received written guarantees that a floating terminal was out of the question, Stavrakis said the government had given them “verbal assurances” that, for a period of at least 18 months since the launch of the NGPC, there would be no such unit.
“We have confidence in the government,” he noted.
But the EAC’s militant unions, who have hinted at strike action, will also need convincing.
Employees suspect the NGPC might be bait thrown to the EAC to lure them into the scheme, fearing that at the end of the day private corporations will take over the market with floating terminals, since at the moment Cyprus lacks any LNG infrastructure.
“We have doubts about this so-called interim period of 18 months…and we shall continue our struggle on the frontlines,” said Sotos Savva, spokesman for the unions.
??
??
??
??
