Technip Energies bags Cyprus LNG gig – and how does this impact Cyprus’s clean energy?

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ENB Pub Note: Interesting about the import into Cyprus, and the Chinese equipment being used on the LNG tanker being converted to the FSRU. It is an excellent use for the older tankers to convert them into FSRUs, but there are now questions about the electronics that go into the updates. I have included the overall energy mix and other FSRU import piers. Getting rid of the fuel oil for LNG and natural gas is excellent for the environment. 

Natural Gas Pipelines to Cyprus

1. Jetty-Borne Gas Pipeline:
   • Connects the FSRU, moored at a jetty, to an onshore receiving point.
   • Made of carbon steel, it delivers regasified natural gas to a metering station.
2. Onshore Gas Pipeline:
   • Transports gas from the onshore receiving point to the Vassilikos Power Station, operated by the Electricity Authority of Cyprus (EAC).
   • Includes valves, cathodic protection, and civil works for safe operation.
3. Buffer Storage Pipeline Array:
   • A network of pipelines to store gas at varying pressures, ensuring supply reliability for the domestic network.

The green lines are proposed/announced pipelines, and the Purple dot on Cyprus is the LNG import site being built.

Proposed International Pipelines:

• EastMed Pipeline: A 2,000 km pipeline to transport gas from the Levantine Basin (Cyprus and Israel) to Greece and Italy. Designated an EU Project of Common Interest, it faces funding challenges (€6 billion) and geopolitical hurdles, remaining in the planning stage.
• Pipeline to Egypt: A proposed subsea pipeline to send gas from Cyprus’s Aphrodite field to Egypt’s Idku or Damietta LNG terminals for processing and export. This is more feasible than a Cypriot LNG export facility but is stalled by commercial and political issues.
• Pipeline to Turkey: A potential 80-mile pipeline to connect Cypriot gas fields to Turkey for EU export via existing pipelines (e.g., TurkStream). This is speculative due to unresolved disputes with Turkey and Turkish Cypriots.

Where Can the Gas Be Shipped To?

1. Domestic Use in Cyprus:
   • Regasified LNG will primarily supply the Vassilikos Power Station for electricity generation, replacing heavy fuel oil.
   • Three licensed independent power producers may also use gas, fostering competition in the electricity market.
2. Potential Export Destinations (Future):
   • Egypt: Gas from fields like Aphrodite could be piped to Egypt’s Idku or Damietta LNG terminals for liquefaction and export to global markets, especially Europe. A 2019 agreement with Noble, Shell, and Delek supports this, but progress is slow.
   • Europe via EastMed Pipeline: If built, this pipeline could deliver Cypriot gas to Greece and Italy, integrating with the European grid. It remains a long-term prospect due to costs and geopolitics.
   • Turkey: A pipeline to Turkey could link to EU markets via existing infrastructure, but this hinges on resolving political disputes.
   • Floating LNG (FLNG): A proposed FLNG terminal could liquefy Cypriot and Israeli gas for export, but high costs and low gas volumes make this unlikely soon.

• Cyprus can import LNG from global suppliers like Qatar, the US, Algeria, or Norway. The Natural Gas Public Company (DEFA) received bids from 25 companies, but contracts are pending.
• The FSRU’s flexibility ensures diverse supply options, enhancing energy security.

• Insufficient gas volumes from Cypriot fields to justify an LNG export terminal.
• Geopolitical tensions with Turkey complicate pipeline routes.
• High development costs for deepwater fields deter investment.

Energy Mix in Cyprus

1. Oil (Heavy Fuel Oil and Diesel):
   • Share: ~85–90% of electricity generation.
   • Powers EAC’s Vassilikos, Dhekelia, and Moni stations, leading to high electricity costs and emissions.
2. Renewables:
   • Share: ~10–12% of electricity generation.
   • Solar: Dominant due to high solar potential, with utility-scale and rooftop PV systems.
   • Wind: Limited by site availability.
   • Biomass/Biogas: Minimal contribution.
   • Cyprus targets 23% renewables by 2030 under EU goals, supported by the National Energy and Climate Plan.
3. Natural Gas:
   • Share: 0%, as gas is not yet used for power generation.
   • The LNG terminal will enable gas use, potentially supplying 30–50% of electricity by 2030, reducing oil reliance and emissions by ~30%.
4. Other:
   • No coal or nuclear power.
   • Energy storage (e.g., batteries) is emerging but insignificant.

Future Outlook:

• By 2030, natural gas could reach 30–50%, oil drop to 40–50%, and renewables rise to 20–25%.
• Gas will support renewable integration as a flexible backup, aiding EU decarbonization targets.

Challenges:

• Energy isolation (no grid interconnections) increases import dependence.
• High infrastructure costs strain finances.
• Geopolitical disputes hinder gas field development.

UPDATE: From LNG Prime.com

Technip Energies confirmed the contract award in a social media post on Monday.

“The import terminal is part of an EU project of common interest that seeks to introduce natural gas to Cyprus with the goal of reducing its dependence on imported oil and facilitating its transition to cleaner energy services,” the firm said.

Technip Energies did not provide further details.

In September 2024, ETYFA invited bids for the provision of project management services for the completion of the delayed LNG import terminal.

The work included architectural, construction, engineering, and inspection services.

In December 2024, ETYFA’s converted FSRU, which will serve the first Cyprus LNG import terminal in Vasilikos, finally left Cosco Shipping Heavy Industry’s yard in Shanghai.

CHI Shanghai, the unit of Cosco Shipping, said the 137,000-cbm FSRU, Etyfa Prometheas, left its yard on December 14.

The firm delivered the FSRU, which was converted from the 2002-built LNG carrier Galea, in January last year.

However, due to delays with the construction of the LNG receiving terminal in Cyprus, the vessel has been waiting at CHI Shanghai since then, the company said.

The FSRU is 296 meters long, 46 meters wide, and it has four regasification units each with a capacity of 105 mmscfd (million standard cubic feet per day).

According to its AIS data, the FSRU was anchored offshore Malaysia’s Kuala Sungai Baru on Monday.

Recent local media reports suggest that the vessel is waiting to be certified as an FSRU, which is expected to be completed later this year.

Cyprus announced the start of construction of its first LNG import facility at Vassilikos in July 2020.

ETYFA previously signed an EPCOM (engineer, procure, construct, operate, and maintain) contract with a Chinese-led consortium, CPP-Metron, for the project.

The terminal includes the jetty and the converted FSRU.

The consortium comprises state-owned China Petroleum Pipeline Engineering, a unit of CNPC, Metron Energy Applications, Hudong-Zhonghua, and Wilhelmsen Ship Management.

However, the consortium has withdrawn from the contract in July last year after a long dispute saying that it “has found itself with no alternative but to terminate its contract with ETYFA.”

The consortium said at the time it “has still not received any payment whatsoever for its work in 2024.”

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