Completion of LNG project at Vasiliko delayed – yet again

After years of delays and shifting timetables, work has begun in Vasiliko for the construction of a jetty to facilitate a floating LNG storage and regasification unit (FSRU), but the completion date has been kicked down the road again, and at an extra cost of €25 million, it was announced on Wednesday.

The announcement comes after outgoing President Nicos Anastasiades on February 3, instructed government departments to do what they could to speed up the project for the import of LNG.

Only two weeks previously, he had chaired a similar meeting attended by the energy minister and the leadership of Etyfa, a subsidiary of Defa, Cyprus’ natural gas public company because the LNG import project had fallen considerably behind schedule.

The infrastructure works, initially set to conclude before the end of 2022, were then expected to be completed by July 2023. But on Wednesday it was announced that the date has been moved again, now to October 2023.

The project involves the construction of a FSRU, a jetty and mooring facilities at Vasiliko, described as the largest energy project in Cyprus with a total value of around €315 million.

The consortium of China Petroleum Pipeline Engineering Co Ltd, Metron SA, Hudong-Zhonghua Shipbuilding and Wilhelmsen Ship Management won the contract for the infrastructure works, while Defa is in negotiations with suppliers of the LNG itself.

According to CNA on Wednesday, the government approved the contractor’s request for a further increase in the price by €25 million due to the rise in the prices of materials. The government in turn is claiming compensation from the contractor for the delays in completing the project.

An indepth look at the project in February 2022 by the Cyprus Mail found that more than two years after the contract was signed, the project was only around four per cent completed at that time.

The FSRU was slated to arrive in Cyprus around June or July 2022 for early commissioning but in February 2022, it was still sitting in the Yangtze river when at that point it was supposed to be in dry dock having regasification equipment installed.

Company representatives told the media on Wednesday that the FSRU, ‘Etyfa Promitheas’ was now 90 per cent ready and that they had submitted a new timetable to the government with the progress that has been made.

They said the delays were down to the Covid lockdowns in China and more recently, in the past year to Russia’s invasion of Ukraine but that now “everything is on track”, the report said.

The project has secured a €101 million grant from the EU under the Connecting Europe Facility (CEF) financial instrument. The rest of the financing comes from the European Investment Bank and the European Bank for Reconstruction and Development.

The entire project includes the FSRU, the jetty, mooring facilities, a pipeline to the power station and a PV storage system among other things.