ETYFA receives unfinished Vasilikos Terminal, plans to complete by 2025

The government is on a countdown following the termination of the contract for the construction of Terminal F.P. at Vasilikos by the CPP-METRON CONSORTIUM LTD. On Friday, ETYFA, the facility's owner, received the unfinished terminal from the Chinese, allowing the next steps to be initiated to complete the remaining 40% of the project not built by the consortium. The government's major challenge now is acquiring ownership of the FSRU ship "Prometheus," which remains in Shanghai. Although Cyprus has paid for its conversion into a floating unit, the ship still requires certifications to allow its departure.

Concerns persist in Nicosia about potential delays from the Chinese, which could affect the ship's departure and consequently delay the terminal's operation and the arrival of F.P. in Cyprus. If the Chinese object, the introduction of F.P. to the internal market cannot be determined. However, there's optimism that F.P. might come to Cyprus by 2025, assuming the ship arrives before the end of this year.

Positive scenario

The delivery of the Vasilikos construction site to ETYFA on Friday is a significant step forward. ETYFA aims to complete the terminal within six months by outsourcing the remaining work to new subcontractors. By Monday, ETYFA plans to finalize contacts with subcontractors who withdrew due to disputes with the Chinese consortium, including Cosco Shipping Companies, Greek Spanopoulos, and Wilhelmsen. These subcontractors had previously assured the President of Cyprus they could complete the Vasilikos project. The selection process for subcontractors will be expedited, potentially wrapping up in a month. If ready options are available, construction could be completed by the end of 2024 or early 2025. This optimistic scenario assumes no issues with the "Prometheus" ship's delivery and certification as an FSRU at Vasilikos upon completing the land construction.

Negative scenario

Conversely, an irregular delivery of the "Prometheus" to ETYFA could cause significant delays. Even if land infrastructure is completed by year-end, it will be impossible to introduce F.P. in Cyprus if the ship is withheld. The possibility of the Chinese blocking the ship's delivery in court until all withdrawal details are settled is not unrealistic. However, sources in Nicosia note that international law strongly favors the owner in such cases. While there is no concern about the ship's delivery, the time required before it anchors at the Royal remains uncertain.

Introduction of F.P.

According to estimates by the Ministry of Energy and ETYFA, if everything proceeds smoothly, Cyprus could have F.P. for electricity generation by 2025. Sources indicate that if both the land infrastructure and the ship are ready within a year, the goal is achievable. However, if the ship's delivery is problematic, delays beyond six months could indefinitely derail the F.P.'s arrival. Such a setback would prolong the current situation, burdening consumers with high tariffs and emissions costs, which have cost Cyprus around €800 million over the past two years.

Timeline of key events
- December 2019: ETFA and CPP-METRON CONSORTIUM LTD sign contract.
- September 2020: Construction begins.
- September 2022: Initial project completion target.
- June 2022: Six-month negotiations lead to a bilateral agreement for an additional €25 million to the consortium.
- June 2023: New project delivery agreement.
- July 2023, October 2023, July 2024: Subsequent project delivery dates.
- February 2023: Consortium appeals to the Court of Arbitration in London.
- January 2024: Suspension of operations at the Royal.
- March 2024: Assurances given to the President for project completion by year-end.
- July 18, 2024: Chinese consortium exits the Royal.