Nicosia said on Tuesday it has received no fresh proposal regarding the export to Cyprus of natural gas from Israeli offshore fields following media reports of a purported $1.5 billion deal on the cards.
“We have no updated proposal, however if a specific and detailed government-to-government proposal does come from Israel it should include the sales price of natural gas at the connection point of conventional electricity producers,” Energy Minister George Papanastasiou told the Cyprus News Agency.
“There is now no time to analyse any new proposals, although, if such proposals did arise, certainly they would be studied,” added the minister.
He stressed that completing the natural gas import terminal at Vasiliko remains “the fastest and most realistic proposal for importing natural gas”.
Importing natural gas is extremely significant in lowering the price of electricity and should be expedited.
The minister said Cyprus makes for “a very small market” in natural gas – approximately 0.6 billion cubic metres a year.
Papanastasiou’s remark about an “updated proposal” referenced a previous similar pitch made by Energean, the company operating Israel’s Karish gas field.
News reports in recent days claimed Cyprus and Israel were in talks on the former importing natural gas via a pipeline, for a 10-year contract said to be worth the $1.5 billion.
The news was first broken by Israeli media outlet Ynetnews, and later picked up by S&P Global. The latter cited a spokesperson for Energean who said the company has submitted a request for an export licence to Cyprus. The spokesperson referred all questions about a contract to Israel’s energy ministry.
Meanwhile, a spokesperson for Israel’s energy ministry told S&P Global that the energy ministries of Israel and Cyprus are in talks “on issues of mutual interest and possible cooperation”.
Ynetnews quoted Israel’s energy minister Eli Cohen as saying that natural gas constitutes a major strategic asset for the country.
The news reports said a potential deal with Cyprus would mark Israel’s first gas sale to Europe.
Israeli policy restricts gas export licences as the country wants to maintain robust strategic reserves for itself.
Commenting on the same reports on a post on X, energy expert Gabriel Mitchell cast doubt on the purported scheme. He noted that Israel’s Karish and Tanin fields already operate near full capacity.
Without significant capacity upgrades, the notion of exporting gas to Cyprus was more akin to “a dream”, the expert wrote.
Israel is now a major gas producer with exports to Egypt and Jordan. The country’s output hit a record high of 24.7 billion cubic metres in 2023, according to Israeli energy ministry data published in May.
Meantime according to daily Politis, the Cypriot government is primarily focused on resolving the complications surrounding the natural gas import terminal at Vasiliko.
The project was thrown into disarray in July when the Chinese-led contractor unilaterally terminated the contract for the construction of the facility.
At the moment, said Politis, the key objective of the Cypriot state is to secure delivery of the floating, storage and regasification unit (Fsru) which is still stranded in a port in China.
The Fsru is an integral component of the Vasiliko import project.
A source told the newspaper they were “cautiously optimistic” about the prospects of the Fsru being delivered to Cyprus.
