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Apostolos Tomaras writes in this Sunday's Kathimerini that negotiations between Cyprus and the Chinese consortium over the "PROMETHEAS" ship, currently in Shanghai, have become a contentious issue as Cyprus seeks to gain control of the vessel.
According to the article, the Chinese are reportedly using the Floating Storage Regasification Unit (FSRU) as leverage to avoid financial consequences after abandoning the Vasilikos terminal project, which remains 60% incomplete. Despite ongoing uncertainty, there is cautious optimism from the Cypriot side about reaching a resolution. However, the unpredictable nature of the Chinese approach has led to concerns about potential setbacks.
The Cypriot government is considering concessions to expedite the return of the FSRU to Vasilikos. This may involve revisiting previously rejected proposals, such as arbitration proceedings in London, which the Chinese consortium had sought to terminate after withdrawing from the project. The consortium had also initiated arbitration, demanding an additional €200 million from Cyprus. The Cypriot side is wary of prolonged legal disputes, especially given the high costs associated with leasing another FSRU to meet its 2025 operational target for the terminal.
Another critical issue under discussion is the €68 million in contract guarantees, which Cyprus had planned to liquidate. The Chinese consortium has recently taken legal action in a British court, apparently to challenge this liquidation. While the Cypriot government views this as a standard procedure, the situation remains fluid, and the guarantees may play a role in the ongoing negotiations.
Meanwhile, Cyprus is preparing to find a new contractor to complete the remaining work at the Vasilikos terminal. The project is expected to be re-tendered in September, to finish by early 2025. This urgency reflects the government's commitment to advancing the terminal's completion despite the challenges posed by the Chinese withdrawal.
In parallel, the Cypriot government is also addressing issues related to the Cyprus-Crete electricity cable. The focus is on revising the timeline for cost recovery, with the Cyprus Energy Regulatory Authority (RAEK) and ADMIE, the cable’s Implementing Entity, expected to reach a decision in August. The preferred solution appears to be linking the start of cost recovery to the commencement of the cable's installation, which would help avoid geopolitical delays and benefit consumers.
