High electricity bills aren’t going anywhere in 2026

Uncertainty surrounding Cyprus’ biggest energy projects is expected to persist through 2026, as delays at the liquefied natural gas terminal in Vasiliko and mounting complications with the electricity interconnector leave little room for optimism.

Construction at the half-finished LNG terminal remains stalled, while the process to advance the undersea electricity cable linking Cyprus to mainland Europe has become bogged down in procedural and financial reviews. Together, the setbacks make it highly unlikely that either project will return to an active construction phase in the near term.

Even within government circles, expectations are muted as officials await the evaluation of a report prepared by French consultants for ETYFA, the state company overseeing the LNG project. The findings are expected to confirm that supplying the domestic market with natural gas in 2026 is no longer a realistic target.

Nearly two years after the withdrawal of the Chinese CPP–METRON consortium, there is still no clear plan for completing the roughly 50% of construction work that remains at Vasiliko. Both the government and ETYFA acknowledge that 2026 is likely to be another transitional year, focused largely on preparatory steps rather than tangible progress.

French Consultants Flag Safety and Process Gaps

On Dec. 19, 2025, Technip Energies submitted a gap analysis to ETYFA, assessing the current condition of the Vasiliko terminal and outlining options for completing the jetty and onshore facilities.

According to information obtained by K, the consultants identified deficiencies in the design and certification of materials procured by the Chinese consortium but never installed. These include pipes and valves for which certification documents are missing.

The consultants warned that the materials cannot be used unless certification is located or alternative verification is carried out, citing safety concerns. The report also raises a key question: whether the remaining construction should proceed through standard public tenders or via an alternative mechanism.

Contractor Search Still Unresolved

Government and ETYFA officials say the priority is to choose a construction path that avoids repeating past failures and ensures the project is completed safely and without further delays.

One option under discussion is potential involvement by the United Arab Emirates. Energy Minister Michalis Damianou has confirmed that the idea has been raised in contacts with UAE officials, though he stressed the talks remain at an early stage.

For now, the government is waiting for ETYFA to clarify how it intends to proceed. The decision will hinge on whether authorities opt for a new round of public tenders, despite the time and legal risks involved, or pursue a political solution that could bring in the UAE.

Timelines Remain Unclear

Neither the government nor ETYFA can say when a new contractor might take over the unfinished terminal. Officials say only that the process of identifying a contractor must be completed sometime in 2026.

That requires ETYFA to finalize construction specifications and resolve outstanding issues related to uncertified materials. Public tenders, officials acknowledge, are slow, and legal challenges could further delay the project, potentially by years.

A Glimmer of Hope: The Prometheus

One of the few bright spots for the LNG project is the vessel Prometheus, a floating storage and regasification unit currently anchored in Malaysia.

Sources in Nicosia say operational procedures for the vessel are complete. What remains is certification to carry LNG cargo and convert it into gas. That certification could have taken place at Vasiliko had construction been completed.

With works at the terminal unlikely to finish in 2026, two options are being considered: moving the vessel to another regional terminal for certification or keeping it anchored in Malaysia until Vasiliko is ready. No decision has been made.

Electricity Interconnector Also Frozen

The outlook is equally bleak for the electricity interconnection project linking Cyprus to Europe via Greece. Construction and related procedures have been frozen for months, including engagements between Greece’s transmission operator ADMIE and regulatory authorities in Cyprus and Greece.

French cable manufacturer Nexans, which is responsible for producing the cable and conducting seabed surveys, has also slowed its activities.

Last week, Greek Environment and Energy Minister Stavros Papastavrou said Greece is moving ahead with commissioning a study to update the project’s financial data. According to K sources, Nicosia was not informed in advance.

Cyprus has made clear it will not pay any of ADMIE’s financial claims, including a €25 million annual cost recovery, until the financial review is completed.

Consumers Bear the Cost

The prolonged uncertainty around both projects is expected to entrench the current situation, leaving Cyprus among the EU countries with the highest electricity prices.

According to information, both the Energy Ministry and ETYFA appear to be backing away from lifting the “emerging gas market” regime, which designates DEFA as the sole importer and supplier of natural gas for a 10-year period.

Within government, earlier discussions about allowing private gas imports as an interim solution are also losing momentum. Such a move would undermine the framework that grants DEFA monopoly rights.

Greek energy company Energean has proposed supplying Cyprus with gas from Israeli fields it operates. Without changes to the existing regime, that proposal is expected to go nowhere.

For consumers, the result is likely to be more of the same: high electricity bills and continued concern over energy security during periods of peak demand.

*Read the Greek version here.