Cyprus still has no clear timetable for the arrival of natural gas, Energy Minister Michalis Damianou confirmed on Tuesday, echoing earlier remarks by Electricity Authority of Cyprus (EAC) chairman George Petrou. Without natural gas, the country’s twin challenges of high electricity costs and supply adequacy remain unresolved.
Speaking before the House Energy Committee during a discussion on the liquefied natural gas import terminal at Vasilikos, Damianou acknowledged that even Technip, the company involved in the project’s technical assessment, is currently unable to provide delivery timelines.
“When we are in a position to provide timelines, we will provide them,” the minister said, stressing the need for the project’s completion.
Talks with the UAE
Damianou revealed that discussions are under way with the United Arab Emirates at an early stage, exploring whether an Emirati company could take over and complete the Vasilikos terminal. The talks include the possibility of a state-to-state agreement.
The terminal project remains in limbo, pending completion of a critical gap analysis study prepared by Technip. The evaluation by ETYFA has not yet been finalised. The study is considered essential for determining the next steps.
EAC chairman Giorgos Petrou told MPs that the authority’s engineers have reviewed the gap analysis and are now in a decision-making phase. “We will have to proceed to tenders,” he said.
€67 million grant to be offset
The project is also facing financial pressure following the revocation of a €67 million EU grant. During the committee session, it emerged that the amount to be returned will be offset against other EU funds allocated to Cyprus.
A Finance Ministry representative explained that an agreement was reached with the European Commission for Cyprus to receive reduced allocations from other EU-funded projects, with some deductions already made during 2025.
Storage units as temporary solution
For now, the only concrete measure to ease electricity adequacy concerns is the installation of energy storage units by the Cyprus Transmission System Operator (TSO), expected to become operational from July.
According to information obtained by Politis, bids are currently being evaluated for three storage units: two of 40 MW with a capacity of 160 MWh each, and one 40 MW unit with a capacity of 280 MWh. The units will be installed in Paphos, Larnaca and Athalassa at locations that do not require additional grid upgrades.
Their operation is expected to stabilise the system during peak demand periods and reduce the risk of power curtailments similar to those experienced last summer.
Broader energy delays
The Vasilikos terminal is not the only delayed project weighing on the country’s energy planning.
During Monday’s discussion on the EAC budget, Petrou disclosed that procurement of new generation units for Dhekelia faces delays, with suppliers indicating delivery timelines of up to four years. These units are deemed critical for maintaining electricity adequacy, particularly if natural gas arrival is further postponed.
Although the EAC maintains that no immediate adequacy crisis is expected barring unforeseen breakdowns, Dhekelia continues to operate on heavy fuel oil. Without natural gas, electricity production costs remain elevated, leaving households and businesses exposed to sustained high energy prices.