Government tells MPs Vasiliko expected to be operational by 2030

The government expects the LNG import terminal at Vasiliko to be up and running by 2030, Energy Minister Michalis Damianos said on Monday. Taking questions from MPs after presenting the ministry’s budget for 2027, Damianos called the LNG project “a priority” for the government, insisting that it would be finished. The objective is to award the tender for pending works before the summer of 2027, so that work can begin during the second half of the year. The government expects that imported natural gas will start being used for electricity generation by 2030, the minister added. He linked the completion of the LNG terminal to energy adequacy as well as the need to reduce Cyprus’ purchase of greenhouse gas emissions allowances. The contract for the LNG project had been awarded in December 2019, but actual work did not start until a year later. The terminal should have been finished by July 2022. There followed four delivery timetables, all missed – September 2022, July 2023, October 2023 and lastly July 2024. In that same month, the Chinese contractor pulled out, citing irreconcilable differences with Cypriot authorities. The government is now looking for contractors to finish pending works. Akel MP Andreas Pashiourtidis demanded a status update on the Prometheas vessel – the floating, storage and re-gasification unit that is an integral component of the LNG project. The ship is still moored in Malaysia. Regarding Cyprus’ offshore natural gas reserves, Damianos said that as things stand these would be used for commercial purposes via exports – rather than for domestic consumption. Turning to energy adequacy and the stability of the electricity grid, the minister said that during 2027 the government plans to install 120MW of storage capacity. Further developing renewable energy sources requires additional storage systems, so as to minimise cuts to PVs. On the high energy costs, Damianos noted that the government has introduced various tax discounts, while potential additional tax reductions are being discussed at the EU level. He said that €100 million has been earmarked for energy upgrade projects for the 2026 to 2032 period. These funds would be targeted at vulnerable households. About 75 per cent of this would be covered by the EU’s Social Climate Fund, the rest from Cypriot resources. The energy ministry’s budget for 2027 comes to €83.8 million – a 42 per cent drop from 2026. Damianos explained that the steep reduction is chiefly due to changes in project financing via the Recovery and Resilience Facility, as well as the fact that the 2026 budget featured supplementary appropriations.