The government of Cyprus has signed a 290-million euro deal with a Chinese-led consortium to build the island nation’s first Liquefied Natural Gas (LNG) terminal. The gas will be mostly used by the Electricity Authority of Cyprus to general electricity.

The Hellenic Shipping News reported that the Natural Gas Infrastructure Company (ETIFA), a subsidiary of the Natural Gas Public Company (DEFA), signed the deal with the consortium which includes JV China Petroleum Pipeline Engineering Co Ltd, Hudong-Zhonghua Co Ltd, Greece’s METRON SA and the Norway’s Wilhelmsen Ship Management Ltd.

The proposed terminal will include a floating storage and regasification unit (FSRU), which will be operated the Norwegian company, as well as a jetty for mooring the FSRU, a jetty-borne gas pipeline and related infrastructure.

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DEFA has issued a tender for the supply of the LNG and this has drawn interest from 25 companies.

According to a statement, the project will be financed by 101-million euro grant from the European Union, the Electricity Authority of Cyprus will provide 43 million euros. The remaining costs for the construction of the terminal will be covered by international lenders such as European Investment Bank and European Bank for Reconstruction and Development.

The operational costs for the terminal are estimated to be at 10.5 million euros a year. It is expected that the project will be completed by early 2022.

The Minister of Energy, Commerce, Industry and Tourism Yiorgos Lakkotrypis said that because of the project, Cyprus’s environmental footprint would be reduced by up to 30 percent and the cost of generating electricity would be reduced by 15 to 25 per cent in the 2022 to 2025 period. Photo: GODL-India/WikkiCommons