12° Nicosia,
15 July, 2024

Chinese consortium exits Vasilikos LNG project

Negotiations lead to amicable split for the completion of the Vasilikos terminal


The Chinese CPP-METRON Consortium Ltd (CMC Ltd) is set to exit the unfinished photovoltaic (PV) terminal project in Vasilikos, according to Cyprus' Energy Minister George Papanastasiou. His admission before the Parliamentary Energy Committee confirmed the ongoing negotiations aimed at an amicable termination of the project contract, avoiding conflict and potential delays in the energy project’s completion. Final decisions are expected by the end of the month.

According to an article written by Kathimerini's Apostolos Tomaras, the focal point of these negotiations is the Floating Storage and Regasification Unit (FSRU) "Prometheus," currently anchored in Shanghai. Once an agreement is reached, the FSRU will set sail for Vasilikos, and the formal exit from the project will be announced. However, the outcome of the negotiations remains uncertain due to financial and other issues raised by the Chinese consortium concerning the delivery of the vessel, which has already been paid for by ETYFA (Natural Gas Infrastructure Company of Cyprus).

The project involves three main components: the Vasilikos pier, the onshore infrastructure, and the FSRU vessel, with the latter being the most complex, comprising 75% of the project. The Vasilikos pier and onshore infrastructure are easier to complete, with 60% already built; the remaining 40% will be handled outside the current project contract.

The FSRU conversion has been completed, pending two certifications: one for LNG transport and another for LNG regasification. While the vessel can sail under conditions for the first certification, the second requires testing at an import terminal like Vasilikos. ETYFA aims for the vessel’s departure within the next few days, coinciding with the contract termination.

Initially, the plan was for the Chinese consortium to complete the terminal at Vasilikos. However, this is now deemed unfeasible. ETYFA and the consortium have recognized the difficulties in smoothly executing the contract due to technical and financial challenges, leading to multiple extensions: September 2022, July 2023, October 2024, and July 2024. The lack of restrictions in the project contract has contributed to these delays.

The Cypriot side is now focused on completing the project through alternative means, ensuring the timely progress of the Vasilikos energy terminal. The anticipated amicable resolution between ETYFA and the Chinese consortium seeks to minimize disruptions and maintain momentum in Cyprus' energy infrastructure development.

[This article is an excerpt of an article written by Apostolos Tomaras in Greek and published in Kathimerini.  Read the full article here]

Cyprus  |  energy

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