99 Annual Report 2021 Furthermore, with Decision no. 91.503, dated 7 July 2020 and based on the provision of the Law, the Council of Ministers appointed the Natural Gas Public Company (DEFA/CYGAS) as the Storage System Operator for thirty years, starting from the date of issuance of the relevant licenses by CERA. In addition, it decided on the partial derogation of implementation until 2025: • of Article 18 of the Law on the Independence of the Transmission System Operator, which provides that the Operator must be independent in terms of its organization and decision-making from monopolistic activities not related to transmission, namely the Distribution, Storage and Operation of the LNG System. As a result, the Transmission System Operator is not required to be independent in terms of its organization and decision-making from the Distribution, Storage and Operation of the LNG System. However, the Transmission System Operator shall be independent in terms of organization and not decision-making regarding the supply of natural gas, and • Article 24 of the Law on the Independence of the Distribution System Operator, which provides that the Distribution System Operator must be independent in terms of its organization and decision-making from monopolistic activities not related to distribution, namely the Transmission, Storage and Operation of the LNG System. As a result, the Distribution System Operator is not required to be independent in terms of its organization and decision-making from the Transmission, Storage and Operation of the LNG System. However, the Distribution System Operator shall be independent in terms of organization and not decision-making regarding the supply of natural gas. Organization and development of the natural gas market In June 2016, following the report submitted by CERA regarding the options for the development of the natural gas market in Cyprus, the Council of Ministers decided on the arrival of LNG in Cyprus as soon as possible and before 2020. LNG will initially be the exclusive option of supplying the internal market with natural gas. Then, after supplying the internal market with natural gas from indigenous deposits, it will be an alternative option that will ensure the security of the energy supply. Following the study conducted by DEFA LTD regarding the development of natural gas market in Cyprus, in order to make good use of the most suitable solution to import liquified natural gas by 2020 at the latest, the Council of Ministers decided, in June 2017, to assign to DEFA LTD the announcement of two invitations to tender for long-term supply of LNG and for a strategic investor for the required infrastructure. Following a decision of the Council of Ministers of April 2018, a Special Purpose Vehicle - SPV under the name Natural Gas Infrastructure Company (ETYFA LTD) was established. This company will implement the required infrastructure for the arrival of LNG. DEFA LTD, acting on behalf of ETYFA LTD, published in October 2018, an invitation to tender for the design, construction and operation of the terminal station of import of LNG in the bay of Vasilikos. The tender was awarded to an international consortium in December 2019. The entry of natural gas in the energy balance, in the context of the objectives of the energy policy for the diversification of the energy sources of the country and the protection of the environment, is an important decision in the energy sector. Considering that the natural gas market in Cyprus is developing, the main goal is to create an organized market, according to the standards of the advanced global markets, and the best practices of the European natural gas market, with the proper operation of all stakeholders in the market, whether they are gas undertakings or bodies established by law.
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