Press Releases

I would like to begin my address by welcoming to Cyprus the Vice-President of the European Investment Bank (EIB) Mr Jonathan Taylor, as well as his associates.

It is with great pleasure that I address today’s signing ceremony of the financing agreement for the construction, by the Cyprus Organization for Storage and Management of Oil Stocks (KODAP), of a privately-owned terminal for storage of oil stocks at the Vasilikos Energy Centre. The agreement reached between KODAP and EIB has essentially secured Cyprus’ first funding with regard to Strategic Governmental Infrastructures in the field of energy and, hopefully, today’s signing marks the beginning of our new long-term cooperation.

KODAP’s privately-owned terminal will serve as a strategic oil reserves depot, in accordance with the relevant European Directive, which imposes the obligation on member states to maintain minimum stocks of crude oil and/or petroleum products. The terminal’s construction is, in fact, an important task for our country as it gives us the opportunity to repatriate the reserves we have been keeping abroad, thus securing a strategic advantage in case of an energy crisis. Moreover, it minimizes the cost of storing our national stocks.

In addition, KODAP’s presence at Vasilikos sets a solid foundation for moving forward with new energy infrastructure planned in the area, including, amongst others, facilities for the import, storage and management of liquid fuels, LPG, asphalt, lubricants and related products. The construction of infrastructure related to the energy sector offers opportunities for synergies and partnerships, which, at the end of the day, will benefit all companies operating in Cyprus.

Ladies and Gentlemen,

The energy sector in Cyprus is currently undergoing major changes, and this partly explains why the Government has decided on the need to create the Energy Centre at Vasilikos. Our principal policy objective, I have to point out, is to transform Cyprus into the energy hub of the Eastern Mediterranean region.

For instance, with regard to our internal energy market, the Council of Ministers decided last year on the import of LNG in Cyprus, as well as on the development of the necessary infrastructure, namely a Floating Storage and Regasification Unit, a jetty intended for the Unit’s safe mooring and, finally, the required pipelines, all to be installed at the Vasilikos area. At first, LNG will be used for power generation at the nearby Vasilikos Power Station, whereas, in parallel, the national natural gas pipeline network will be developed.

To implement this infrastructure by 2020, we have, in fact, been awarded a grant from the “Connecting Europe Facility”, for the amount of €101 million. Of course, a total of around €250 to €300 million is estimated to be required for the entire project of importing LNG to Cyprus, and presently we are in discussions with EIB regarding the Bank’s involvement in its financing.

At the same time, we are working towards the liberalization of our internal electricity market, for which the introduction of natural gas is a prerequisite. The target date for the new market rules to be in place and all players to have the capacity to implement them, is July 2019. In the meantime, new producers and suppliers may conclude bilateral contracts based on transitional rules.

To achieve our targets, we are also actively encouraging the penetration of renewables in our energy mix. Renewable energy sources constitute for the moment, the only indigenous source of energy able to contribute to the reduction of the country’s dependence on imported petroleum products, increasing security of energy supply, diversifying the island’s energy balance and reducing environmental pollution.

To this end, we are, once more, requesting the support of EIB. Recently, we have received applications for RES (renewable energy sources) projects of a total capacity 400 MW, which for Cyprus represents around 13,5% of the annual electricity production. As expected therefore, some of these projects require funding in order to move to the implementation stage, hence EIB can potentially play a key role in providing such funding.

Distinguished guests,

In closing, I wish to emphasize that the main concern of the Ministry of Energy has always been the safe supply of the Cypriot market with high-quality fuel, at the lowest possible cost. As such, we are extremely pleased that KODAP’s initiatives lead today to important new investments in the petroleum sector, which, in turn, will eventually contribute to the improvement of petroleum supply services.

I warmly congratulate all those who have worked for the implementation of KODAP’s strategy, sincerely wishing every success in your efforts.

Thank you all for your kind attention.

(GA/ΑΗ/II)