Row over Vasiliko terminal deepens

Natural Gas Infrastructure Company (Etyfa) on Friday slammed what it called the “unfortunate and desperate attempt” by the consortium constructing the beleaguered natural gas terminal at Vasiliko to “mislead public opinion” by publishing “untrue claims” about the project.

Only two months ago the CPP-Metron Consortium Ltd (CMC) and the Cyprus government appeared to have put aside a myriad of disputes related to the multi-million-euro project and construction was resumed after the Chinese-led company halted work earlier in the year.

However, on Thursday CMC issued a statement saying that it could no longer stay silent on the issues following numerous press articles by Etyfa and the government about delays to the work.

The consortium said it had considered it harmful to engage in a “trial by media” at the time but now felt forced to “defend itself” against increasingly hostile reports.

CMC said that on March 14, it had confirmed that Etyfa had not taken delivery of the vessel “Prometheas” – the floating storage and regasification unit (Fsru) and centerpiece of the Vasiliko project – despite the vessel being ready since mid-January 2024.

The ship is still in China.

The company said it did not wish to break certain confidentiality agreements but could “confirm that there has been no action on the part of Etyfa to take delivery and start using this critical national asset belonging to the Republic of Cyprus”.

CMC said it was “extremely surprising” that Etyfa as the legal owner of the FSRU is not putting it to work even before the onshore and jetty works at Vasiliko were ready, adding that it could be earning money by putting the ship into commercial use in other ways such as becoming an LNG carrier.

“Etyfa knows all this, but for reasons best known to them, they have done nothing,” the statement said.

“On the contrary, it appears that Etyfa is now looking for reasons not to accept delivery of a vessel that is waiting for delivery and can be readied for operations with a modicum of effort,” CMC added.

The consortium said the vessel was seaworthy and had undertaken over 2,000 nautical miles of sea and gas trials in one of the world’s busiest shipping lanes under the supervision of Lloyds Register “and even Etyfa representatives more than eight months ago.

It added that on January16, 2024, Lloyds Register issued a “Statement of Readiness for Delivery” in favour of the vessel which was officially communicated to the Cypriot side, and there was a handover ceremony at the shipyard in China in January 2024, “to which Etyfa was officially invited but did not attend”.

“Despite repeated requests from CMC to progress the delivery of the vessel to Etyfa, the vessel remains in Shanghai with Etyfa failing to accept it,” CMC said.

The company said it had been trying to engage with Etyfa on various logistical but not contractual matters for more than one year, regarding the completion and sailaway of the vessel to Cyprus.

“Etyfa have chosen to ignore all requests relating to the practicalities of delivering the vessel. To that extent, the timing of the vessel’s arrival in Cyprus is in Etyfa’s hands and CMC cannot be responsible,” it concluded.

The consortium did not get into any specifics on the reports of onshore delays in building the terminal itself that have sprung up over the last two or three years and which are reportedly back on hold.

The LNG terminal project has been funded with €101 million from the European Commission and €240 million from EU banks.

Etyfa on Friday expressed “surprise” at CMC’s announcement

“Respecting the relevant confidentiality provisions binding it, Etyfa will not follow the Chinese consortium in its unfortunate and desperate attempt to mislead public opinion about the relevant facts. We will simply be content to unequivocally reject the claims of the Chinese Consortium as completely untrue”, it said in a brief statement.

A month before the meeting in March that helped get the project re-started, Energy Minister George Papanastasiou warned CMC should be “counting the days” before it receives a notice of termination.

In late March, China’s ambassador to Cyprus Liu Yantao said the work would be finished by the end of this year. He said the Fsru in Shanghai was “more than 99 per cent complete” and that the vessel should be formally delivered to the Cypriot side by April or May.

Regarding the infrastructures on land at Vasiliko, Liu said works there were 50 per cent complete.

The CMC consortium has filed a claim for €200 million against Cyprus at the London court of arbitration, claiming the incurring of higher costs and the alleged failure of the project manager, Etyfa, to carry out its contractual obligations.