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CYGas goes for LNG

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CYGas chose to move forward with the firm “DLA Piper (UK) LLP – Navigant Consulting (Europe)” for the two tenders, of which, next month’s first is for the supply of liquefied natural gas and the second for the connected port and land infrastructure.

The tender request for the provision of liquefied natural gas (LNG) is expected to be published within the next few weeks, while the tender for port and land infrastructure for the pumping and transportation of natural gas from the ships to the EAC reception point in Vassilikos is expected to be published in June.

The award of a contract for legal commercial and financial consultancy services to the “DLA Piper (UK) LLP – Navigant Consulting (Europe)” firm was decided on Tuesday by the the Board of Directors of the Natural Gas Public Company (CYGAS/ DEFA).

With the two invitations to tender with the help of the consultants, the Cypriot government, moves forward with the seventh since 2006 procedure for the provision of liquefied natural gas for the production of electricity. As it is known, the previous six efforts reached a dead end.

This is the first try for the provision of LNG in Cyprus as a permanent and not a temporary solution, meaning that the infrastructure itself will be permanent while the provision of LNG will be subject to individual contracts. The goal is to accomplish the provision of liquefied natural gas (LNG) by January 1st 2020, in order to avoid EU fines for emissions.
This solution will remain as a backup even after the arrival of natural gas from Cypriot deposits in case there is a temporary interruption in the provision of gas.

CYGas estimates that the Vassilikos infrastructure (floating unit for storage and gasification of liquefied natural gas, jetty etc.) will cost €250 million, of which €101 million will come from European Union funds.The prospect of a land gasification unit is examined as well. For the rest of the funds there is interest from the Europan Investment Bank, while, according to the decision of the Ministers’ Council, EAC may decide whether or not to have a 30% participation to the contruction of a specialist vehicle.
To the question of why the already existing infrastructure, like the jetty of the private fuel terminal in Vassilikos was not used, Mr Cassianides responded that the existence of state infrastructure was a prerequisite for the acquisition of the €101 million EU funding.

Instructions to CYGas about the new scheme for the import of liquefied natural gas were given by the Minister of Energy after a decision made by the Ministers’ council last May.This decision was made in order for AEC to produce electricity from natural gas, since, if this does not happen, the cost for the addition of anti-emission technologies as well as the fines for the emissions will contribute to the rise of the cost of electricity.

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