Meeting on LNG expected by end of this week

This week could prove critical for the development of the liquefied natural gas (LNG) terminal project at Vasiliko as Energy Minister George Papanastasiou prepares to meet with officials from CPP-Metron Consortium Ltd (CMC), it emerged on Tuesday.

Last week, Papanastasiou said that the government has not ruled out walking out of the deal, stressing that the LNG project will either be completed with the current contractor, or “other solutions” will be sought.

The ongoing dispute escalated after the consortium halted works in late January, also cutting off Etyfa, the state-run natural gas infrastructure company which owns the project access to all communication.

It also moved to claim €200 million from Cyprus in arbitration proceedings at a London court.

Papanastasiou had also said that efforts were being made for talks with the consortium but had gotten nowhere.

However, on Tuesday daily Phileleftheros reported that the government a top executive of the Chinese-led consortium has accepted the government’s invitation for a meeting and is set to travel to Cyprus by the end of the week for a consultation on the resumption of works and the drafting of a new schedule for the project’s delivery.

It was also reported that during the preliminary meetings with the Chinese ambassador, the government reiterated a few points, most of which have already been publicly shared by the minister and other officials:

That any additional financial claims on part of CPP will only be considered at the level of the Arbitral Tribunal, in London.

That the Cypriot government is not going to pay “a single cent,” as the minister stated, as part of another consultation, while another process is underway.

It also demanded that CPP informs without further delay about the date of resumption of the project in Vasiliko, which was yet again pushed back in December and is currently on standby.

As said by Papanastasiou, if CPP is unable to return to the project and resume work on an agreed date, the Republic of Cyprus will terminate the contract and seek an alternative solution to complete the terminal.

Finally, the government’s desire for the completion and delivery of the project by the existing contractor was stressed.

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.