The companies constructing the delayed liquified natural gas (LNG) import terminal at Vasiliko are open to exploring alternative agreements beyond the scope of the current contract, Energy Minister Geroge Papanastasiou said.
Speaking after the House energy committee met behind closed doors, the minister said the two contracting parties, Etyfa and the Chinese company CPP, have shown a willingness to reach a different agreement regarding the completion timeline of the terminal.
“All alternatives are on the table” and are under discussion between the contracting parties, stressed the energy minister.
Papanastasiou said that “on the one hand, there is a contract that we insist should be honoured by the contracting parties and, on the other hand, there is a willingness of the two parties to reach a different agreement, but this will depend very much on the two parties.”
He explained that the different agreement will see the completion horizon of the terminal, “not necessarily in the context of the specific relationship that comes from the contract, possibly beyond the contract”. This suggests a potential extention of the terminal’s completion timeline.
Regarding the floating unit, Papanastasiou said it is “completed”, adding that there are ongoing consultations with the contractor and naval architect for certification. The vessel “may sail from China to Vasiliko, provided that all documents are in place and all arrangements are made for the departure of the ship to Vasiliko,” he said.
The House energy committee’s closed-door session primarily focused on the progress of the LNG import terminal and the Great Sea Interconnector project. Papanastasiou’s request for confidentiality stemmed from sensitive arbitration issues with CPP Metron currently under review at the arbitration court in London.
CPP Metron, the contractor responsible for constructing the onshore LNG terminal, has filed a claim for additional compensation from the Republic of Cyprus amounting to €200 million.
Committee chairman Kyriakos Hadjiyiannis stressed the importance of confidentiality, warning that even a minimal leak could have significant legal implications against the public interest.
“Any information that is disclosed could be used in the ongoing arbitration cases,” he said.
Among the officials participating in the session were the permanent secretary of the finance ministry, the president of the Cyprus Energy Regulatory Authority, the board president of the Electricity Authority of Cyprus, the president and the general director of the Natural Gas Public Company and the Natural Gas Infrastructure Company, and representatives from the Cyprus Transmission System Operator and the Distribution System Operator.
Cyprus signed the contract for the LNG project back in December 2019. The whole project should have taken 22 months to complete, however, the contractor has halted all work at the land-based LNG facilities at Vasiliko, citing the non-payment of invoices by Cyprus.
The consortium, is also seeking €200 million in additional compensation through arbitration proceedings in London. This claim comes despite the original contract being awarded for €500 million, with current expenses already exceeding €542 million.
Switching to natural gas for power generation is crucial for Cyprus, as it would cut carbon dioxide emissions by 30 per cent, potentially saving the island tens of millions of euros in greenhouse gas penalties.
Meanwhile, the Great Sea Interconnector is a €1.9 billion project aiming to link the electricity grids of Cyprus, Greece, and Israel through the world’s longest submarine power cable. Promoters of the project suggested Cypriot consumers could save as much as €400 a year.
Source: Cyprus Mail