Economic analysis of the Vasilikos LNG import project costs in Cyprus

The Vasilikos LNG import project in Cyprus is facing significant economic challenges due to rising capital costs, which have increased several-fold from the initial estimate of €300 million. While natural gas remains more efficient than heavy fuel oil, with conversion rates of 55-60 percent, the infrastructure cost has become a major factor in the final price. Analysts calculate that with an international LNG price of $8 per MMBtu, the final cost for power stations reaches between $15.5 and $17.0 per MMBtu. Infrastructure capital recovery alone accounts for $5.5 to $6.5 of that price, with additional costs coming from maintenance, operations, and logistics. The supply chain includes purchasing, delivery to the Prometheas FSRU, regasification, and transport via high-pressure pipelines to the EAC and PEC power stations. Consequently, experts warn that the public debate must shift from focusing solely on the international commodity price to examining the full, high-cost value chain.