**Cyprus Engages Energy Giants for New Natural Gas Exploration**
The government of Cyprus is actively negotiating with major energy companies regarding the rights to explore and drill for natural gas in unreserved blocks of the country's exclusive economic zone (EEZ). President Nikos Christodoulides made this announcement on Friday, emphasizing the strategic importance of these discussions in the context of regional energy security.
In his remarks, President Christodoulides highlighted that the ongoing talks are aimed at not only securing exploration rights for additional blocks but also at fostering cooperation in the eastern Mediterranean with neighboring countries such as Egypt and Israel. This collaborative effort is intended to establish an alternative energy corridor for Europe, which has become increasingly critical in light of recent geopolitical developments, particularly following Russia's invasion of Ukraine. The conflict has prompted European nations to seek alternatives to Russian gas, making energy security a top priority for the European Union and its member states.
The President stated, “In addition to the blocks which have been allocated, we are in talks with energy giants for the allocation of other blocks,” underscoring the government's commitment to enhancing the region's energy resources. He noted that the Cypriot government is working on a specific plan to facilitate the arrival of natural gas at the planned liquefaction terminal in Vasiliko, which is considered a vital component of Cyprus's energy strategy.
Progress on the liquefaction terminal project has faced significant delays over the past two years. The China Petroleum Pipeline Engineering Co consortium and Metron Energy Applications SA, which formed the CPP-Metron Consortium (CMC), terminated their contract with the Cypriot government in July 2024. The consortium cited issues with timely payments and alleged "bullying" from the public natural gas infrastructure company Etyfa. The situation was further complicated by the status of a floating storage and regasification unit (FSRU), which was intended for use in Cyprus but has remained moored in Malaysia, awaiting certification.
The FSRU had been a contentious issue between Etyfa and CMC, with the latter claiming that the vessel was ready for delivery but that Etyfa had inexplicably refused to accept it. Additionally, the European Commission has demanded that Cyprus repay nearly €69 million in grants allocated for the terminal, citing potential irregularities during the tender evaluation process.
The liquefaction terminal project, initially contracted in December 2019, was expected to take 22 months to complete. However, the delays have raised concerns about the future of Cyprus's natural gas ambitions.
In the EEZ, Cyprus has already allocated rights to several blocks. Italian energy company Eni and France’s Total jointly hold rights to Blocks 6, 7, 8, and 11, while Block 12 is jointly owned by Hungarian firm MOL, American multinational Chevron, and Israeli company NewMed Energy. Blocks 2, 3, and 9 were previously held by Eni and Korean company Kogas, but their licenses expired last year without renewal. Former Energy Minister George Papanastasiou noted that while surveys and exploration were conducted in Blocks 2 and 9, the results did not indicate promising natural gas deposits.
As Cyprus continues to navigate the complexities of its energy landscape, the government's ongoing discussions with energy giants represent a critical step towards enhancing the country's role in the regional energy market and contributing to broader European energy security. The outcome of these negotiations, along with the resolution of existing project delays, will be pivotal in shaping the future of Cyprus's natural gas sector.