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Chinese-led consortium adjusts LNG terminal timeline, aims for July 2024

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The LNG site at Vasiliko

The Chinese-led consortium with the contract to build a liquefied natural gas (LNG) terminal at Vasilikos have just filed a new timetable, promising to deliver the project by July 2024, the Cyprus Mail has learned.

Sources apprised of the matter told us that China Petroleum Pipeline Engineering Co (CPC) presented their latest work timetable to Cypriot officials three weeks ago – specifically on July 21.

The Chinese now promise to deliver the project by late July of next year.

That means their previous timetable for delivering by October this year has now been pushed back by another ten months.

But our sources said that, regardless, this latest timetable was the “most realistic” seen so far.

“Their previous deadlines were just not pragmatic,” they commented.

The LNG terminal will include a floating, storage and regasification unit (Fsru), a jetty for mooring it, a jetty-borne gas pipeline and related infrastructure.

The entire project has been costed at around €300 million. It 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 Fsru – the purpose-built vessel that will convert imported LNG into gaseous form so that it can be fed into the Vasilikos power station to generate electricity – had until recently presented the biggest stumbling block.

Back in April Energy Minister George Papanastasiou had said the vessel was still in dry dock at Cosco’s shipyard in Shanghai. At the time, the ship vessel had been expected to arrive in Cyprus sometime in July.

That, we learned, has now been delayed to October. The sources said the ship should set off from China in late September. The voyage to Cyprus takes about three to four weeks.

“The Fsru is near 96 per cent finished,” the same sources said.

They also revealed that recently the ship underwent a sea trial, and that it’s next scheduled to go through a gas trial to test the equipment.

The sea trial itself turned up a long list of technical issues – from minor to major – relating to both operations and safety.

The detected technical issues numbered “in the triple digits.” But this was not uncommon in the business, the sources said.

All these problems will obviously need to be resolved before the ship – dubbed ‘Etyfa Promitheas’ – can get a seaworthiness certificate from Lloyd’s Register clearing it to sail.

The vessel takes its name from Etyfa, the project promoter. Etyfa s a subsidiary of Defa, the natural gas public company.

“The Chinese are making an effort, and the situation has certainly improved compared to before,” said our sources.

Now, the chokepoint for the project is not the ship but rather the jetty where the ship will be moored.

The Cyprus Mail learns, for example, that out of the 770 piles required to support the jetty, only about 150 piles have been placed to date.

While acknowledging that a great deal of work is left on the jetty, the sources stressed what was more important was that the work rate is accelerating.

“Right now, they’re driving in about six piles a day.”

It was way back in December 2019 when Cyprus signed the contract with the consortium. Since then, the contractor has submitted four delivery timetables – September 2022, July 2023, October 2023 and now July 2024.

In February of this year 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.

 

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