NICOSIA – Cyprus signed a deal on Friday with a Chinese-led consortium to build the east Mediterranean island nation’s first natural gas import terminal that officials said will help the country generate cleaner and cheaper energy.

Energy Minister Georgios Lakkotrypis said the 289 million-euro ($323 million) floating terminal will help reduce Cyprus’ carbon footprint from electricity generation by up to 30%.

The terminal is designed to convert imported liquefied gas back into gaseous form for use in Cyprus’ main power plant.

A consortium of China Petroleum Pipeline Engineering, Metron, Hudong-Zhongua Shipbuilding and Wilhelmsen Ship Management is expected to finish construction by early 2022.

The terminal that’s expected to be completed by early 2022 is to be built by a consortium of China Petroleum Pipeline Engineering, Metron, Hudong-Zhongua Shipbuilding and Wilhelmsen Ship Management.

Financing for the project includes 101 million euros ($113 million) in European Union funds and low-interest loans from the European Investment Bank and the European Bank for Reconstruction and Development. The Electricity Authority of Cyprus contributed 43 million euros ($48 million.)

The facility is expected to help reduce the cost of generating power by an estimated 15-25% by substituting natural gas for crude, Lakkotrypis said.

The terminal will be wholly owned by the Cypriot state and afford authorities flexibility for spot purchases of lower-cost gas on the international market, while allowing for future use of natural gas from gas fields discovered off Cyprus’ shores, he said.

So far, three gas fields have been discovered in the Mediterranean Sea where Cyprus has exclusive economic rights. Companies licensed to search for gas off Cyprus include ExxonMobil and partner Qatar Petroleum, as well as Italy’s Eni and France’s Total.