The Detailed Implementation Plan for the Project PCI 7.3.2 Cyprusgas2EU

 

 

 

Project step

(expected) start date

(expected) end date

Identification of CyprusGas2EU Options

Nov-15

Mar-16

Planning Studies

Apr-17

Aug-17

Inclusion in the National Plans

-

-

Preliminary Design Studies

Mar-17

Jul-17

DEFA LNG Supply Options Study

Nov-16

Feb-17

Market Test (for gas)

Jun-17

Nov-17

Preliminary Investment Decision

Jul-16

Jun-17

Public Consultation Process

Dec-15

Dec-20

Permitting Granting Process

Jul-16

Dec-19

Financing

Jul-17

Oct-17

Cross Border Cost Allocation

Jul-17

Sep-17

Exemption From third Party Access

Sep-17

Sep-17

Final Investment Decision

-

-

FEED

Oct-17

Mar-18

Tendering

Mar-18

Jun-18

Construction

Jun-18

Dec-19

Commissioning

Dec-19

Dec-19

 

All technical, commercial and financial studies are taking place using the resources of the CEF Synergy co-funded Action n° 2016-EU-SA-0009 – “CYnergy”.

 

Project step

Description

Identification οf CyprusGas2EU Options

 

Planning Studies

As part of CYnergy Action (n° 2016-EU-SA-0009) the planning studies have already taken place by the CYnergy Consortium partners and external advisors.

Inclusion In the National Plans

Currently there is no TSO Gas, therefore there are no National Plans for gas infrastructure prepared by TSO Gas in Cyprus. The project has been included by the Project Promoter (MECIT) in the TYNDP of ENTSO-G in December 2016.

Preliminary Design Studies

The Conceptual Design has been prepared in March 2017 and the Basic Engineering Design has been finalized in July 2017. The Environmental Impact Assessment study (EIA) is currently finalized and it will be submitted to the Department of Environment in early August 2017.

DEFA LNG Supply Options Study

Tender for the Provision of Consultancy Services for a Study of the Options of LNG Supply to Cyprus - DEFA 009/2016. The study has illustrated that the optimum solution for Cyprus is a Floating LNG Import Terminal. This Tender results from Ministerial Council’s Decision at its meeting held on 18 May 2017.

Market Test (for gas)

Market test begins by the date of the Ministerial Mandate to CYGAS (18 May 2017).

Preliminary Investment Decision

The Council of Ministers, at its meeting held on 22 June 2016, decided to approve the import of Liquefied Natural Gas (LNG) to Cyprus the soonest possible and in a manner leading to the commencement of natural gas supply by the year 2020 and authorized the Minister of Energy, Commerce, Industry and Tourism to mandate the Natural Gas Public Company (CYGAS) to conduct a study and prepare a detailed plan for the most appropriate process, and related infrastructure, for LNG imports, storage processing and regasification, in an onshore or offshore unit, as well as for the infrastructure necessary for the inland transportation and distribution of gas. Following the Ministerial Council’s Decision, Reference Number E80.843 dated 22.6.2016, the Council of Ministers, at its meeting held on 18 May 2017, decided, among others, to mandate Natural Gas Company (CYGAS) to prepare, issue, and execute an invitation for tenders for supply of LNG to Cyprus.

Public Consultation Process

Public Consultation begun with the adoption of the 2nd PCI list and the initial discussions for the Master Plan and the Strategic Environmental Assessment (SEA) study with stakeholders (2015). Public Consultation ends upon the start of operation of the FSRU. Public Consultation in Greece involves various meetings with stakeholders in the period June-October 2017. Additional meetings in Greece will be scheduled until October 2017.

Permitting Granting Process

The Project Promoter in collaboration with National Competent Authority for the PCIs in Cyprus (NCA) have prepared a list of consents/permits/ approvals required for the FSRU. NCA has prepared a Manual of Procedures, a Manual for Environmental Permitting and related Environmental Regulations for streamlining of permit granting procedures for the above and other PCIs.  Also, NCA will prepare additional legislative and non-legislative measures for reducing the total duration of permit granting in Cyprus. NCA is organizing a One Stop Shop for PCIs in electricity and gas sectors.

Financing

The project will be financed partly from EU grants, and partly from loans, while up to 30% will be equity from private investors (namely Electricity Authority of Cyprus-EAC). The Project Promoter along with CYGAS has performed a number of meetings and communications with local and European Banks (EIB, EBRD, etc.) to ensure financing through debt. Moreover, the Project Promoter will apply for a grant under the 2017 CEF Energy Call in order to cover the financing gap.

Cross Border Cost Allocation (CBCA)

CBCA is taking in consideration the complementarity with the EastMed pipeline (Cluster of Projects 7.3) and the potential exchange of LNG between the national gas markets of Cyprus and Greece for the period 2024-2039.

Exemption from third Party Access

Cyprus has the right to apply derogation from specific articles of the Directive 2009/73/EC.

Final Investment Decision

See Preliminary Investment Decision

FEED

FEED will progress based on the preliminary design studies using CYnergy Action (n° 2016-EU-SA-0009) resources. Most parts of the project will be progressing in parallel.

Tendering

The output of FEED will be developing the tendering documents, while the tender is planned to take place by Q2 2018. Tender will be executing based on the National and European Laws of Procurement.

Construction

Most parts of the construction will be progressing in parallel.

Commissioning

Requirement based on standard/international practice.

 

 

 

 

Risk Identification

Mitigation Measures

Capital cost inflation

Time delays and schedule risk

Suitable EPC contract arrangements.

Experienced and financially strong contractor.

Liquidated damages for contractor-caused delays.

Regulatory / political risk and delays

 

Timely engagement with CERA and MECIT. Continuous Consultation with governmental departments and services.

 

Availability of LNG supplies /

Changes in global LNG market conditions and regional Mediterranean gas market

Regular monitoring and commercial support to CYGAS (DEFA).

Availability of LNG vessels and / or suitable candidates for conversion to FSRU

Prudent choice of solution provider.

Any restrictions on LNG procurement (e.g. using a small scale vessel)

Addressed through the choice of recommended solution

Specification (capacity/size, send out capacity, utilisation, redundancy, storage, suitability, ability to handle seasonal/daily gas demand variations)

The market analysis completed by GCA and CYGAS (DEFA) provides sufficient confidence at this stage in the recommended solution.

Marine risks (jetty/reloading configuration, port security, proximity to other marine operations)

Addressed through suitable marine EPC contractor, adequate liaison with local authorities and governmental departments and services.

Environmental and social impact

The considerable preparatory work/previous environmental studies suggests that the recommended solution is of manageable impact.

Project management (operations and deliverability of gas import infrastructure provider e.g. FSRU provider)

 

Prudent choice of solution provider.

 

Operating risk (potentially a Contractor may operate any FSRU or regasification facility).

Prudent choice of solution provider.

Tightly defined O&M agreements.

Obtain insurance against property damage, 3rd party liability and/or business interruption.

Financing cost / budget (debt vs equity, alternate structures, proposed cost, likely modification and conversion costs).

 

Early engagement of financial advisor.

 

Financial risk (lease vs purchase, tolling fees, capacity fees, utilisation fees, operating fees).

Early engagement of commercial advisor.

 

Commercial risk (contracts, pricing, market dynamics).

Early engagement of commercial advisor.

 

Interface risk (due to complex nature of the interactions in entire gas value chain).

Prudent choice of EPC and solution provider.