Cyprus LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.

Cyprus LNG Terminal, also called Vassiliko FSRU or the CyprusGas2EU project, is a proposed LNG import terminal in Cyprus. While the import terminal remains under construction, the export terminal appears to be cancelled with no development updates since 2015.


The map below shows the location of the project, near Vassiliko Port, in Larnaca District.

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Project Details

Import Project Details

  • Owner: DEFA
  • Parent company: DEFA
  • Location: Vassiliko (Vasilikos) Port, Larnaca District, Cyprus
  • Coordinates: 34.72772, 33.30104 (exact)
  • Capacity: 0.6 mtpa[1]
  • Status: Construction[1]
  • Type: Import
  • Cost: €312 million (US$355 million)[2]
  • Financing: European Investment Bank loan of €150 million, Connecting Europe Facility grant of €101 million, European Bank for Reconstruction and Development loan of €80 million, €43 million equity contribution from the Electricity Authority of Cyprus[3]
  • Start Year: 2023[4]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Export Project Details

  • Owner: DEFA
  • Parent company: DEFA
  • Location: Vassiliko (Vasilikos) Port, Larnaca District, Cyprus
  • Coordinates: 34.72772, 33.30104 (exact)
  • Capacity: 5.0 mtpa, 0.72 bcfd
  • Status: Cancelled (potentially revived in 2022)
  • Type: Export
  • Cost: 6 billion USD
  • Trains: 3 to 8
  • Start Year:

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day


Import proposal

In 2015, Forbes estimated the cost of the Cyprus LNG Terminal at US$6 billion.[5] It will include an LNG floating storage and regasification unit (FSRU), a jetty intended for the unit’s mooring, a jetty borne, a natural gas pipeline and an onshore gas pipeline, a shoreside block valve facility, an onshore natural gas buffer solution and a pressure reduction and metering station. The planned LNG facility will have an LNG storage capacity of 120,000-250,000 m3 and will aim to provide a send-out capacity of regasified natural gas of up to 220T/hour(max yearly sendout of approx.2.44b cm /year and a max daily average of approx.76.17GWh /day) initially and be able to cover additional capacity requirement in the future. It is partially funded by the European Union (105,737,320 EUR/117,178,098 USD) and is listed as a Project of Common Interest (PCI). Commissioning is expected in 2022.[6]

Since at least 2009, the government of Cyprus has been promoting a proposal to build a liquefied natural gas (LNG) regasification facility near Vassiliko Port in Cyprus. The facility would import LNG for power generation at the 865 MW Vasilikos power station, as well as for industrial and residential purposes.[7] It would be built by Natural Gas Public Company (DEFA), the Cypriot state-owned gas company.[8][9] In October 2016, DEFA initiated a study of the gas import proposal.[10]

In October 2018 the Cypriot government launched a tender for the import terminal at Vasiliko port, and in January 2019 extended the deadline for offers to March 2019.[11]

In August of 2019, the Natural Gas Public Company of Cyprus (DEFA) announced that a Chinese-led consortium has been chosen as the preferred bidder for the construction of the EUR 250 million LNG import terminal and related infrastructure. The consortium includes JV China Petroleum Pipeline Engineering Co Ltd, AKTOR S.A. and METRON S.A., with Hudong-Zhonghua Shipbuilding Co. Ltd and Wilhelmsen Ship Management Limited.[12]

The LNG import project is co-financed by a grant of 40%, or up to US$111 million from the European Union’s “Connecting Europe Facility”. The terminal is scheduled for completion in 2021. It will include a floating storage regasification unit (FSRU), a jetty for the mooring of the FSRU, jetty-borne and onshore pipelines, as well as additional facilities.[13]

The terminal is being built by a consortium of China Petroleum Pipeline Engineering, Metron, Hudong-Zhongua Shipbuilding and Wilhelmsen Ship Management.[14]

Construction of the FSRU-based import terminal at the Vasilikos port in Cyprus started in July 2020.[7] It was also reported that DEFA had opened a tender for the supply of LNG and had received expressions of interest from 25 international companies.[15]

In November 2021, the import project was included in the 5th PCI list published by the European Commission.[16] It was also reported that construction work at Cosco's shipyards in Shanghai had begun on the ship that will convert LNG at the import terminal in Vasilikos Port. The timetable for the start of operations was updated to "within the first half of 2023".[4]

As of February 2022, the Cyprus LNG import terminal was reportedly only 4% complete, and its projected start-up date had been pushed back to July 2023.[17] The timeline for completion of the terminal suffered another setback later the same month, when large quantities of illegally dumped chemicals were discovered at the construction site, raising the prospect of a time-consuming cleanup operation.[18]


In June 2020, it was reported that the European Investment Bank (EIB) had agreed to provide the import project with a loan of €150 million euros, a decision which triggered the payment of a €101 million grant from the European Commission, which had already approved the project as part of the Connecting Europe Facility programme.[4] [19] The European Bank for Reconstruction and Development has also provided the project with an €80 million loan, and the Electricity Authority of Cyprus is providing a €43 million equity contribution.[3] In December 2020, the European Commission announced that it had approved, under EU State aid rules, Cyprus's intention to issue a state guarantee for securing the project loans.[20]

Question marks over contracting and high project costs

Just prior to the EIB's decision to finance the Cyprus LNG terminal, French newspaper Libération called into question the legitimacy of the contract tendering process and the allegedly inflated cost of the project. Referring to an internal EIB project document, Libération contended that the handling of the tender process amounted to a no-bid contract. The document stated that two other offers had been rejected "before any detailed, technical and financial assessment", with the Chinese-led consortium then being awarded the project contract. The same EIB document noted that: "The price of the project puts it in the high end for such a scheme."[21]

Cypriot energy analyst Charles Ellinas expressed similar concerns in local media at the time, adding doubts over whether the Chinese-led consortium had the technical expertise to deliver the project.[19]

Construction problems

In February 2022, an investigation by the Cyprus Mail revealed a litany of technical and construction problems dogging the project which have left construction progress considerably behind progress at 4% complete, according to sources. There is ongoing speculation that the Chinese contractors are seeking additional funds of between €25 million and €100 million to cover cost overruns. The President of Cyprus, Nicos Anastasiades, has urged the project's development to be sped up and, in light of the problems hampering the project, a new completion date of July 2023 has been proposed by the contractors.[22] The new July 2023 completion date may be optimistic owing to the extent of the project's difficulties which have been stirring debate in Cyprus.[23]

Further complications for the project's development were also reported by Cypriot media in February 2022 as large quantities of illegally dumped toxic and radioactive chemicals were found at the site of the proposed terminal. The chemicals were reported to be buried deep into the ground, which will make it difficult to extract them, and a further complication is that Cyprus does not have facilities to dispose of such chemicals.[24]

Export proposal

There was a proposal - separate from the import/regasification project — to build a 5-million-metric-ton-per-year (mtpa) LNG liquefaction facility at the same location, the Vassiliko Port.[25] The proposed export terminal would have had a minimum of three trains and a maximum of eight trains.[26]

In August 2014, the Cypriot government entered into negotiations with several firms over the LNG facility. In June 2015, several oil & gas companies declared Cyprus's Aphrodite gas field to be commercially viable.[27] According to one proposal, Israeli gas would also be exported from the Cyprus LNG facility.[28]

Forbes reported in November 2015 that if Egypt joins Cyrus and Israel in a venture to import gas to Egypt, the three countries have enough infrastructure to form a regional Eastern Mediterranean gas hub.[5]

There have been no development updates on the export terminal since 2015 and the project was presumed to be cancelled. However, in 2022, Energean proposed to export gas from its gas fields in Israel to Cyprus for "liquefaction using a floating liquefied natural gas vessel (FLNG) at Vasilikos and export to Europe." This proposal was reportedly in an effort to end dependency on Russian energy following the invasion of Ukraine.[29]

Articles and resources


  1. 1.0 1.1 2020 World LNG Report, page 102, International Gas Union, April 27, 2020
  2. Ten Year Network Development Plan 2020 - Annex A - Projects Tables, ENTSOG, accessed Dec. 13, 2021
  3. 3.0 3.1 EBRD supports decarbonisation of energy sector in Cyprus, European Bank for Reconstruction and Development website, Jul. 31, 2020
  4. 4.0 4.1 4.2 Elias Hazou, Work begins on LNG ship for Cyprus, Cyprus Mail, Nov. 9, 2021
  5. 5.0 5.1 Simone Tagliapietra and Georg Zachmann, "Egypt Holds The Key To The Eastern Mediterranean's Gas Future," Forbes, November 29, 2015
  6. Development of gas infrastructure in Cyprus European Commission, accessed December 2, 2019
  7. 7.0 7.1 "GIIGNL Annual Report 2021 (p 45)" (PDF). GIIGNL. November 2021.
  8. LNG Supply to Cyprus, Cyprus Ministry of Commerce, Industry, & Tourism presentation, 6 Apr. 2009.
  9. Cyprus to look at importing LNG, Cyprus Mail, 7 July 2016.
  10. Cyprus revives LNG import plans, Interfax Global Energy, 28 Oct. 2016.
  11. Cyprus extends tender deadline for LNG import facility, LNG World News, Jan. 25, 2019
  12. Shailaja A. Lakshmi China-led Consortium Bids for Cyprus LNG ENERGY: Energean ups the ante in bid to supply natural gas to Cyprus, Marine Link, August 25, 2019
  13. ENERGY: Energean ups the ante in bid to supply natural gas to Cyprus, Financial Mirror, November 19, 2019
  14. Chinese-led consortium to build Cyprus’ gas import terminal, Associated Press, December 13, 2019
  15. Gary Lakes, Cyprus enters LNG era with FSRU groundbreaking at Vassilikos, S&P Global, Jul. 10, 2020
  16. ANNEX to COMMISSION DELEGATED REGULATION (EU) …/... amending Regulation (EU) No 347/2013 of the European Parliament and of the Council as regards the Union list of projects of common interest, European Commission, Nov. 19, 2021
  17. "LNG project: Problems from the outset". Cyprus Mail. February 7, 2022.
  18. "More delays for LNG terminal due to dumped chemicals". Financial Mirror. February 23, 2022.
  19. 19.0 19.1 Elias Hazou, After 15 years, we're still waiting for gas, Cyprus Mail, Jun. 14, 2020
  20. State aid: Commission approves State guarantee for the financing of the LNG terminal in Cyprus, European Commission, Dec. 8, 2020
  21. Jérôme Lefilliâtre, Chine : le gaz chypriote à portée de gain, Libération, Jun. 7, 2020
  22. Elias Hazou, LNG project: Problems from the outset, Cyprus Mail, Feb. 7, 2022
  23. Dr Charles Ellinas, Radical new choices may be needed for LNG imports, Cyprus Mail, Feb. 6, 2022
  24. More delays for LNG terminal due to dumped chemicals, Financial Mirror, Feb. 23, 2022
  25. Cyprus, Total sign MoU for LNG terminal, Reuters, 7 Nov. 2013.
  26. Cyprus Considers Eight Train LNG Export Terminal, GCaptain, July 12, 2013
  27. Cyprus: several factors to determine LNG development, LNG World News, 19 Apr. 2016.
  28. Cyprus President invites Israel to seriously consider exporting gas from Cyprus LNG plant, Famagusta Gazette, accessed July 2017.
  29. "At last, a bankable LNG project for Cyprus | Cyprus Mail". Retrieved 2022-06-29. External link in |website= (help)

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