On 27th and 28th March 2014 IENE (Institute of Energy for South-East Europe) in cooperation with FMW (Financial Media Way) organized the 3rd Energy Symposium in Hilton Park Nicosia. The symposium was attended by a wide spectrum of National and International audience with a large number of speakers posing their views and ideas on the strategy for the exploitation of natural gas fields in Cyprus and the Eastern Mediterranean, the operation of the electricity market under the new liberalized regime and the Renewable Energy Sources parameter to achieve energy efficiency.
The speakers highlighted the geopolitical importance of the findings of hydrocarbons in the Eastern Mediterranean, as these were also recognized in the recent European Council Summit on 20/21 March 2014. As it was mentioned Cyprus is a European pillar of stability and a factor to achieve energy stability and security in the European Union. It was emphasized that the energy consequences of the late Russia – Ukraine crisis drove Russia into considering other potential importers such as China, and Europe searching for alternative suppliers. Currently the Union is entirely depended on imports, spending over 400 billion euro in 2012 for this purpose (natural gas, petrol) and 546 billion a year for carbon, which translates to 1500 euro per European citizen. The energy scenery is facing dramatic changes and Cyprus could be an important player to corroborate Europe’s energy needs and achieve diversification of its resources.

It is estimated, as the Minister of Energy of Cyprus indicated, that the European energy demand will increase from 45% to 60% by 2020. In this respect, the European Union has already approved three Projects of Common Interest (PCI) involving Cyprus: The Euroasia Connector between Israel – Cyprus – Greece, a pipeline from offshore Cyprus to Greece mainland via Crete, and an LNG storage located in Cyprus (‘Mediterranean Gas Storage’). The Minister added that there has been a progress in negotiations between the government and the licensed companies regarding the LNG terminal in Vassilikos and the challenge rests on the discovery of larger quantities of hydrocarbons to make it competitive. In the second semester of 2014 the consortium between ENI and KOGAS will begin the drilling activities in this respect.

The investments in Cyprus have already begun and there are projects which are almost completed as the CEO of VTT Vasiliko Ltd revealed. The construction of an oil storage terminal in Vassiliko, an investment of an estimated amount of 300million euros is expected to commence offering its service by July 2014 and is a clear indication of the interest of foreign investors on the prospects of Cyprus in the oil and gas sector.

The speakers also drew special attention to the value of renewables could play in the battle to achieve energy security and efficiency. Without underestimating that the backbone of a healthy system is conventional energy, it was emphasized that a balance between the two is the ideal course of action. It was acknowledged that the challenge rests on the implementation of a legal and regulatory regime to achieve the integration of Renewable Energy Sources in the Energy Market.

Marina Theodorou
Trainee Lawyer