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Cyprus to examine reasons for rejection of Russian Itera’s gas price offer

September 15, 2013, 21:24 UTC+3
Cyprus is actually the only European Union country to produce electricity using fuel oil and diesel fuels
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NICOSIA, September 15 (Itar-Tass) - President of Cyprus Nikos Anastasiadis said on Sunday his country’s government did not reject any offers concerning natural gas supplies, including the one made by Russia’s Itera.

Last Thursday, Cyprus’ Natural Gas Public Company DEFA announced its decision to cut short talks with Russia’s Itera, which had offered the lowest price for temporary gas supplies for electricity production in Cyprus. The talks were hard ones and some two weeks ago the Russian company reduced the price further down. But DEFA said it was an unprofitable offer. Itera however refused to change its offer, saying it was a reasonable and beneficial one that could bring Cyprus millions euro in profits.

Anastasiadis, who met with Itera CEOs on Wednesday, said he had issued instructions to the country’s Audit Chamber to examine electricity production calculations which were behind DEFA’s rejection of Itar’s offer. “I want to be sure there will be no political problems with friendly countries and that solutions helping to reduce electricity costs will not be turned down,” he said.

Currently, Cyprus is actually the only European Union country to produce electricity using fuel oil and diesel fuels. Hence, the republic has the EU’s highest electricity tariffs. The European Union demands that Cyprus switch to gas, which is seen as a more environment friendly and economically beneficial fuel. So, the Cyprus government is selecting gas suppliers for a definite period - till 2018. By that time, Cyprus plans to begin its own gas production at fields that were discovered in its exclusive economic zone in 2011.

At a recent tender, Russia’s Itera offered the lowest price and became the most preferred supplier. Its initial offer was 16 U.S. dollars per one million BTU (British Thermal Unit). Later on, it brought this price down to 14.75 U.S. dollars. Independent experts say this offer is advantageous for Cyprus.

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