• The new Board of Directors of DEFA is assuming its duties, with the participation of government technocrats for the close monitoring of fiscal and energy implications.

• The main priority is the completion of the Vassilikos terminal, following the termination of the contract with the Chinese consortium and ongoing arbitrations.

• Proper financial management is required to cover legal expenses and safeguard the €101 million European funding allocated for the project.

• DEFA must prepare the liquefied natural gas supply tenders, aiming to reduce electricity generation costs and pollutant emissions. The new management is called upon to ensure the viability of ETYFA and restore the organization's credibility with European partners.

At a critical juncture for the implementation of Cyprus's energy plans, the new Board of Directors of the Natural Gas Public Company (DEFA) is assuming office against the backdrop of ongoing unresolved issues regarding the LNG Terminal at Vassilikos and multi-million court disputes.

The composition of the new Board emerged following the Advisory Council process and consists of Georgios Pistentis in the presidency and Paris Constantinou in the vice-presidency. The remaining members are Thomas Sepos, Constantinos Danos, Kyriacos Stylianou, Dr. Nikos Solomou, and Constantinos Pittas.

Of particular importance for the balance and oversight of procedures is the appointment of the Director General of the Ministry of Finance, Andreas Zachariades, and the Director General of the Ministry of Energy, Kyriacos Iordanou. The presence of these two technocrats at the same table sends a clear message that the government will closely monitor the fiscal and energy impacts that may arise from the organization's decisions.

The Unresolved Issues of Vassilikos

According to DEFA technocrats who spoke to INK, the new Board of Directors is called upon to manage a vast agenda, with the most critical issue being the completion of the re-gasification terminal. Following the termination of the contract with the Chinese consortium (CPP) and the referral of the dispute to the London court of arbitration, DEFA and its subsidiary, ETYFA, are expected to redesign and execute the plan for the completion of the infrastructure (jetty and land facilities) at Vassilikos.

In the financial sector, the Board is tasked with ensuring the sound management of funds relating to legal and advisory services for the arbitration, thereby protecting the €101 million European funding that has been granted for the project.

At the same time, planning for the Liquefied Natural Gas (LNG) procurement processes is also underway.

DEFA, as the exclusive importer, must prepare the tenders for the supply contracts so that, upon completion of the infrastructure, it becomes possible to bring in natural gas for electricity generation purposes—a development tied to reducing electricity costs and greenhouse gas emission penalties.

The new Board of Directors is called upon to address the pressing needs of the domestic energy market, as delays in the arrival of natural gas intensify uncertainty for private producers. The gradual breaking of deadlocks at Vassilikos is a prerequisite for the smooth operation of the Competitive Electricity Market, which cannot develop without the availability of conventional fuels with lower costs and lower emissions.

The financial sustainability of ETYFA is also expected to come under the microscope of the new management. The increased expenditures arising from legal battles and the maintenance of the Floating Storage and Regasification Unit (FSRU) "Prometheas" require delicate handling so as not to burden the state budget. The Ministry of Finance has already made it clear that capital flow depends strictly on the progress of construction works and compliance with revised timelines.

A crucial challenge is also the restoration of the organization's credibility with European partners. The continuous upsets in the project's schedule cause ongoing concern in Brussels, with the new Board carrying the weight of steering the project back onto an implementation track.

Source: ink.com