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The ambitious Vasilikos gas terminal project in Cyprus is facing significant financial and logistical hurdles, with an additional €200 million needed to complete construction. The Ministry of Finance is now reviewing funding options, as officials warn that delays could further escalate costs and prolong Cyprus' reliance on expensive energy sources.
Funding Uncertainty and Tight Deadlines
During a recent Parliamentary Energy Committee meeting, Finance Ministry spokesman Dionysis Dionysiou confirmed that the ministry is assessing how to cover the extra cost. Energy Minister George Papanastasiou insisted that the project could still be completed by the end of 2025, though he acknowledged that this is an "ambitious" target.
Progress has been made on the onshore terminal and pier, but strict oversight from the General Accounting Office has slowed decision-making, officials said. Papanastasiou emphasized that while delays are frustrating, all procedures are being followed in accordance with the law.
Challenges with Floating Gasification Unit
A key component of the project, the floating gasification unit "Prometheus," remains in Malaysia, awaiting certification for two additional systems worth €7 million. The vessel itself is valued at around €200 million, but officials are now considering alternative solutions to expedite its deployment. The ship had previously been eyed for temporary chartering in Egypt, but with Vasilikos infrastructure incomplete, the government is hesitant to divert it elsewhere.
Political and Economic Concerns
MPs from across the political spectrum raised serious concerns about the project's financial and logistical challenges. DISY MP Kyriakos Hatzigiannis warned that every month of delay costs consumers around €10 million in additional energy costs due to pollution penalties. He stressed that legislative cooperation is needed to streamline the process, as multiple components—including the ship, pier, onshore facilities, and distribution network—are not progressing in sync.
AKEL MP Costas Kostas was even more critical, arguing that the project's final cost will far exceed initial estimates. He also pointed out that ongoing deterioration of the Vasilikos pier due to lack of maintenance could lead to further expenses.
Meanwhile, Ecologist MP Stavros Papadouris expressed skepticism about the government's timeline, warning that unresolved infrastructure issues will make it difficult to meet the 2025 deadline. He also questioned whether Cypriots would see a meaningful reduction in electricity costs anytime soon, blaming previous administrations for a lack of strategic energy planning.
Urgency for Action
Despite the challenges, AHK Chairman George Petrou confirmed that the Electricity Authority of Cyprus is prepared to connect to the gas supply as soon as it arrives. However, delays in constructing the transmission network remain an obstacle, with the consultant responsible for its design and supervision set to cost €15 million.
*With information from CNA
