Energy Minister expects developments on Cyprus' confirmed gas deposits

Cyprus’ Minister of Energy, Trade and Industry Natasa Pilides has told CNA she expects developments soon regarding the exploitation of Cypriot natural gas fields, given the large increase in natural gas prices internationally.

In an interview with Cyprus News Agency, the Minister noted that Cyprus could play a role in Europe`s energy supply either through its own gas reserves or through the electricity interconnection projects that aim to connect Cyprus with Europe.

Asked whether the developments in Ukraine can accelerate the development of Cyprus’ confirmed gas deposits, Pilides pointed out that the government is definitely encouraging the involved companies to move in that direction.

"We expect the Chevron consortium to come up with specific suggestions regarding the `Aphrodite` deposit. We hope that the right synergies can be established in relation to either Israel or Egypt in order to achieve a more optimistic timetable, given the current opportunities," she noted, adding that they expect to see developments with regards to "Aphrodite" between the end of March and the beginning of April.

Pilides also stressed that Cyprus is in consultations with the EU and supports the position that it can play a role in EU’s energy supply.

She added that at the moment gas quantities are very limited but other research activities are also expected soon. As she said, by the end of March, the ExxonMobil - Qatar Energy consortium will complete the appraisal drilling in Cyprus’ block 10 -which is estimated to carry a reservoir between 5 and 8 trillion cubic feet.  Officials are eagerly awaiting the drilling results.

At the same time, she noted that the Eni-Total consortium will proceed with drilling within the year, while seismic work will begin on block 5 by ExxonMobil to see if there is an interconnection with block 10 and if there are prospects in that area.

Asked whether she was concerned about the recent Turkey-Israel meeting and whether she thought it would deprive Cyprus of some opportunities in the energy sector, the Minister pointed out that Cyprus` cooperation with Israel is excellent in various aspects of energy.

"Our plans are not being thwarted," she said, adding that she would meet with her Israeli counterpart on April 11 when she will visit the country to continue discussions they had in Egypt.

Noting that the neighboring countries have their own cooperation and are doing their own consultations with states in the region, she expressed the view that this does not stop or hinder the excellent cooperation that has been built with Israel, as was also reflected in a meeting between the President of the Republic and the President of Israel during his recent visit to Cyprus.

The EU recognizes the importance of Cyprus` electricity interconnection

Minister Pilides also noted the importance the EU attaches to the electricity interconnection project of Cyprus with Europe.

She said that the implementation of the EuroAsia Interconnector, namely the interconnection between Cyprus and Crete, was progressing rapidly, while the Crete-Attica interconnection is already at an advanced stage and will be completed in 2023.  The goal, she noted, is connecting to the European market in the first stage.  During the second stage, the Cyprus-Israel pipeline will be built. Then, she added, the EuroAfrica Interconnector will connect Egypt with Cyprus.

Pilides stressed that the project for the interconnection secured an EU grant of €657 million, which is really a huge amount considering that the total amount of the specific fund was €800 million.

"The EU has really supported Cyprus in this area as it recognizes the importance of interconnection," she said.

The goal, she added, was to start the construction of the pipeline at the end of 2022, which will enable the Cyprus-Crete interconnection to be implemented by 2026.

The interconnections, she explained, mean much greater energy security, and a possibility of importing and exporting energy, giving impetus to more investments in renewables and new technologies.

"With these new technologies we can increase our contribution in terms of our own energy supply and export," she said.

Government to extend measures to address high prices

Commenting on the economic consequences for Cyprus from the war in Ukraine, Pilides said that this crisis comes at a time when Cyprus expected a dynamic growth after the difficulties that the economy went through due to the pandemic.

She added that many sectors of the economy will certainly be affected, due to the increase in energy costs worldwide but also due to the shortage that may occur in various products such as grains.

She referred to the measures taken by the government along with the EU's support measures, one of which was the reduction of VAT on electricity to 5% for vulnerable consumers and to 9% for other household consumers. The government, she said, will monitor the developments and these measures are likely to be expanded and extended.

Regarding the increase in grain prices, she said that the effort of the government was to buy stocks to prevent any shortages and the possible imposition of a ceiling or a clause in the agreement with the importers who will manage and resell these quantities to the producers.

She also referred to the two major plans approved by the Cabinet at Wednesday`s meeting for energy upgrading of business buildings and public buildings, as well as other ongoing plans to boost investment in renewable energy and to help green transition which will also reduce the cost of electricity.