This is a best prospect industry sector for this country. Includes a market overview and trade data.
The Republic of Cyprus (ROC), located at the crossroads of Europe, Africa, and the Middle East, offers opportunities for U.S. energy and energy-sector service providers in the areas of consulting, environmental assessment, offshore hydrocarbon exploration and exploitation, supply of natural gas for domestic use, and basing of auxiliary energy services for the wider region. Currently the island is powered almost exclusively by heavy fuel oil and limited renewable energy sources. The government is making efforts to import natural gas for domestic use. It is also increasing its focus on renewable energy as part of its strategy to meet EU Green Deal goals and to avoid significant EU carbon emission penalties (please see separate section on renewable energy). Exploration and exploitation of natural gas deposits in the ROC’s Exclusive Economic Zone (EEZ) have slowed due to COVID-19 but are expected to continue. Efforts to monetize confirmed and other recently discovered natural gas deposits in the ROC’s EEZ are ongoing. Some options being considered for monetization include a pipeline to Egypt’s existing Liquefied Natural Gas (LNG) facilities and the construction of an onshore LNG export plant in the ROC, assuming licensed operators discover sufficient deposits of natural gas.
In 2014, the Republic of Cyprus ended the state-owned Electricity Authority of Cyprus’s (EAC) monopoly on electricity generation and distribution. Stimulating competition remains difficult given the small size of the domestic market, but the Euro-Asia and Euro-Africa electricity interconnectors offer emerging opportunities for regional energy distribution. The Cyprus Energy Regulatory Authority (CERA), in cooperation with the Transmission System Operator (TSO) and other energy stakeholders, is working to alleviate competition constraints in the power generation sector. Although New Market Rules (NMR) are partially implemented already, full implementation is not expected until 2022.
The U.S. Embassy Political/Economic team can assist any company interested in pursuing energy opportunities in the Republic of Cyprus. For more information on the energy landscape, please contact Commercial Specialist Ms. Ephie-Yvonnie Charalambidou.
Leading Sub-Sectors and Opportunities
Bunkering Infrastructure Development / Port Facilities:
Partially funded by the Connecting Europe Facility (CEF), the Poseidon Med II project covers the ROC, Greece, and Italy. Used as a practical roadmap, it aims to promote the adoption of LNG as a safe, environmentally efficient, and viable alternative fuel for shipping. The Cyprus Ports Authority (CPA) is a partner in the project. The ROC must have the bunkering infrastructure for LNG fuel ready by 2025. The Ministry of Transport, Communications, and Works is planning the extension of the Vasilikos port to facilitate bunkering and other shipping and energy-related services. It is seeking investors for a Finance, Design, Build, Operate, and Transfer project.
The ROC and Egypt are discussing potential natural gas exports from the ROC’s EEZ. Industry experts anticipate a tender for the construction and maintenance of two pipelines — one to deliver gas to existing LNG facilities in Egypt, most likely Idku, and the other to bring gas onshore to serve the domestic Cypriot market. The Cyprus Hydrocarbons Company (CHC) and the Egyptian Natural Gas Holding Company (EGAS) have reviewed the technical details to transport natural gas via pipeline from the ROC’s Block 12, “Aphrodite” field to Egypt. The ROC and the ROE have already signed the necessary intergovernmental agreements to facilitate the project.
Construction and Development of a National Transmission and Distribution Natural Gas Pipeline Network:
The independent, government-chartered Natural Gas Public Company (DEFA) has a monopoly on national natural gas infrastructure. It plans to issue a tender for the construction and development of a natural gas onshore distribution network to supply consumers with natural gas once it becomes available in Cyprus. The first phase of the project, with an estimated value of close to 71 million dollars (60 million Euro), will consist of three pipelines that will supply the Electricity Authority of Cyprus’s (EAC) three power plants located in Vasilikos, Dhekelia, and Moni. In the future, DEFA will further develop the network to cover cities and industries and will use the initial pipelines as the backbone. The entire network will have a total length of about 80km. DEFA has already secured a funding commitment from the EU’s European Energy Program for Recovery (EEPR) worth approximately 11.8 million dollars (10 million Euro).
Education – Energy Related Degrees from Cypriot Universities in Collaboration with U.S. Universities:
With the discovery of offshore hydrocarbons in the ROC’s EEZ and the potential for additional discoveries in the future, as well as the increasing growth of renewable energy on the island, many local universities are designing curricula and degree programs in hydrocarbons, petroleum engineering, and related sectors. Cypriot universities are interested in establishing linkages with U.S. universities specializing in these and related fields.
Natural Gas Public Company (DEFA)
Cyprus Energy Regulatory Authority (CERA)
Ministry of Energy, Commerce, and Industry – Hydrocarbon Services Department
Cyprus Hydrocarbons Company (CHC)