2020 Cyprus Country Report

The unprecedented
coronavirus
pandemic
and the subsequent
lockdowns
around the world have
sped up digitisation. The crisis
will have implications for business
globally for the next 12 to
72 months mainly on service
providing sectors such as aviation,
cruise, and hospitalities.
New and more productive
ways of working will eventually
evolve and the faster we adapt,
the better the recovery. While
automation was already a big
part of DP World’s business
model, digital technologies
are a big part of the solution
in maintaining a productive
workflow within our ports.
Nawaf Abdulla
CEO
DP World Limassol
THE HYDROCARBONS EFFECT
Cyprus’ transport and logistics sector has already
seen big benefits from the discovery of natural
gas in Cypriot, Israeli and Egyptian waters – even
before all these resources have been extracted and
monetised. Cyprus-based logistics companies
have been able to capitalise on the island’s geographical
advantages to offer specialised support
to oil and gas companies such as ExxonMobil and
ENI as they operate both in Cyprus’ own offshore
gas fields and those of its regional neighbours.
The operations of ENI in Egypt’s giant Zohr gas
field for instance, have been underpinned by facilities
provided by Limassol port. Gas pipelines
destined for Zohr were stored at Limassol before
being shipped to Egypt and the field’s pipelaying
vessel was also mobilised from the port.
As the search for offshore natural gas accelerates,
Limassol port enjoys a strong competitive
advantage as the logistics base for the increasing
number of multinational oil and gas giants
and service companies drawn to the island.
International port operator DP World Limassol
has already provided Cyprus with significant
added muscle as the island strives to become the
region’s pre-eminent energy services and trading
hub. An onsite oil and gas logistics base has also
been established at Limassol port. It is a multi-user
area that includes a 430-metre dedicated berth
to oil and gas activities, mobilisation/demobilisation
operations, open bonded and covered storages
and warehouses, offices and drilling liquid
production facilities to support oil and gas operations
and offshore explorations in the Eastern
Mediterranean. In 2019, DP World Limassol acquired
a range of state-of the-art vessel-loading
equipment for the handling of general cargo and
for use in its dedicated 430-metre oil and gas
berth. Its new mobile harbour crane with heavylifting
capabilities will speed up the process of
loading and unloading, resulting in a significant
reduction in vessel turnaround time. The new
crane will help maximise the multipurpose port’s
potential and will lead to a higher turnover at all
its berths.
KEY FUEL TERMINAL
The island’s reputation as a leading logistics and
support provider for the oil and gas industry in
the East Med is complemented by its emerging
role as a centre for the processing, storage and
re-export of fuel. This is largely due to the development
of a sophisticated €300-million fuel
distillation terminal at Vassilikos. It is operated
by VTTV, the Cyprus subsidiary of Dutch multinational
VTTI, and processes so-called ‘white’
or ‘clean’ products that have already been refined,
such as diesel or middle distillates. These are
shipped to Vassilikos from producers in the Gulf
and the former soviet states and are then blended
or modified to meet the specifications of the
European market.
VTTV is the first energy terminal of its kind
in the Eastern Mediterranean which connects
Europe and the Black Sea with markets in the
Middle East and Asia. Product fuel oil from the
Black Sea area heading to markets in Asia must
first be transported in small ships because of
shallow waters in the Bosporus. At Vassilikos,
VTTV helps to ‘build bulk’ and processes the
cargo to the correct specifications for it to be exported
economically via much larger vessels to
the more distant markets of Asia.
The existing VTTV terminal consists of 28
tanks and has a capacity of 544,000 cubic metres,
a 1.5km long deep-water marine jetty and four
berths, capable of accommodating vessels from
5,000 to 160,000 DWT. These facilities mean that
it is ideally placed to benefit from the growth
in ship-to-ship cargo transfer operations in the
region. Most transfers take place offshore, saving
on port fees but this can be difficult and dangerous
in bad weather and can lead to environmentally
damaging oil spills. VTTV’s purpose-built
jetty provides a safer, less environmentally hazardous
alternative.
In 2020, the oldest Cyprus petroleum
company Petrolina joined international energy
trader VTTV in Vassilikos, inaugurating a new
€80 million liquid fuels storage facility. The stock
exchange-listed company has tripled its capacity,
by installing 18 storage tanks holding 113,000
cubic metres, up from the 36,000 at the old terminal
in Larnaca. The Vassilikos area is being developed
as Cyprus’ new energy centre and dedicated
port, with multimillion-euro plans underway to
also build a liquified natural gas (LNG) import
terminal.
ATTRACTIVE CRUISE PORT
Before the pandemic, Cyprus was gaining momentum
in reviving its status as an attractive
port of call for cruise ships exploring the Eastern
Mediterranean region. Evidence of this was
British operator TUI announcing 13 new destinations
leaving from Limassol Port for the winter
season 2019-20, which was expected to boost
tourism numbers. Although many of the cruises
follow the familiar Mediterranean formula, more
exotic routes were also launched such as a sail
from Barbados to Limassol. To strengthen Cyprus’
maritime tourism, a new passenger terminal was
inaugurated in 2018 by port operator DP World
Limassol, with plans to increase passenger traffic
of the port by 35%. Even before the establishment
Sector Profile
Country Report CYPRUS 2020 147