AKEL on the proposal of the Norwegian company Hoegh

AKEL C.C. Press Office, 16th May 2020, Nicosia

It is with particular interest that we are following the processes and discussions for the introduction of liquefied natural gas in Cyprus. As AKEL, we consider the project an absolute necessity for the country and we will take the lead in every way for its successful completion. The great delay in the arrival of natural gas is the responsibility of the Anastasiades-DISY government which is already costing Cypriot consumers millions of euros.

It is on the basis of this perception that we have supported and will continue to support the construction of the necessary state infrastructures by the Natural Gas Infrastructure Company of Cyprus (ETYFA) in Vasiliko. The fact that there is 101 million euros in funding from the EU and that its borrowing costs will be very low has also contributed to supporting this option. In AKEL’s view, it is necessary for the state to have its own infrastructures which will return the liquefied natural gas to its original status or will represent a backup infrastructure.

The above procedure has two very serious drawbacks. First of all, there are still questions about the final price of the natural gas. That is to say, whether the cost of purchasing liquefied natural gas and the cost of returning gas to its original status will set a final price that will lead to a reduction in electricity costs.

The second and most important disadvantage is the fact that the time of completion of the project is not known since it has not started yet. According to the most optimistic forecasts, over the next three years it is not expected that we will have completed infrastructures in place so that we will be able to gasify natural gas. All this time, if the Cyprus Electricity Authority (AHK) continues to use conventional fuels in electricity generation, this will entail huge costs.

The solution to the above two problems seems to be given by the proposal of the Norwegian company Hoegh, which promises the supply of liquefied natural gas and its gasification at very low prices and in a short period of time. We do not know the details of the proposal, nor are we able to evaluate it. However, we call on the government and all the relevant authorities to study this proposal with the due seriousness and documentation, whether the possibility exists to use it for the benefit of consumers.

AKEL’s main position is that the state infrastructures must proceed quickly, but also with respect for the principles of transparency and sound management. At the same time, there should be no exclusions, nor any predetermined choices when it comes to selecting suppliers. The government, the Natural Gas Public Company (DEFA) and all the relevant authorities must study every proposal wherever it may come from, with the sole aim of what is in the best interest of consumers and the environment.