Filenews 5 January 2023 - by Chrysanthos Manoli
In the face of a very serious - and with painful economic and environmental consequences for the island - fiasco, it is very likely - almost certain, for many in the energy sector - that the new Government will find in March, as the information and indications lead to the conclusion, that it is impossible to complete and operate in 2023 the natural gas regasification terminal in Vasilikos.
The project belongs to ETYFA (a subsidiary of DEFA) and was undertaken by a joint venture under the Chinese China Petroleum Pipeline Company (CPP).
Regardless of what the Government and other official authorities assure from time to time, the projects for the infrastructure of the LNG terminal in Vasilikos - both at sea and on land - are... non-existent and those who know the natural gas transport, reception, processing and delivery industry strongly argue that even if tomorrow real and substantial projects for the pier (in close proximity to the existing VTTV pier for tankers), the mooring and stabilization infrastructure at that of the FSRU (built by COSCO in China) are launched in Vasilikos, the piping connecting the ship to points on the coast and outside the EAC power station and the infrastructure for the transmission of natural gas to private potential generators in the surrounding area, it is impossible for the project to be delivered for use at the end of July 2023, as claimed by DEFA (Natural Gas Public Company).
The predictions of factors with knowledge on the subject are very worrying: They argue that with the long delay observed in the start of works for the above infrastructure - and especially the pier - it is under discussion whether the terminal can operate even in 2024.
In addition, there is insufficient official information on where the construction of the FSRU Prometheus is in Shanghai and whether it is also lagging behind. If the works for the FSRU proceed according to the last schedule - which wanted the terminal in Vasilikos to be ready for operation in the summer of 2023 - then it is possible that the FSRU will be delivered for use, but the rest of the infrastructure will not be ready, with the result that the ship will be just an attraction for bathers on the Governor's Coast or in Zygi.
There is also no information on where the process of committing - buying - and at what prices - liquefied natural gas for local electricity generation is located, either under a long-term contract or through a process in the spot market.
CERA said no
Things are even more serious, considering that CERA has rejected as incomplete and inadequate, only last December, the proposal that DEFA submitted with great delay to obtain permission for the projects connecting large consumers to the natural gas project. Following this development, DEFA was invited by CERA to re-launch a public consultation on the Proposal for Connection Projects by January 23rd, which means a new loss of time for the infrastructure for the transmission of regasified natural gas to EAC or to private generators. Without the approval of CERA, the natural gas transmission system cannot be set up, therefore the regasification operation cannot begin either.
Provided that the information about a long delay in the operation of the LNG terminal will be confirmed, it is inevitable that the burden on electricity consumers and the economy in general will continue to be burdened with approximately €200 million per year for the purchase of greenhouse gas emission allowances. The use of natural gas is estimated to reduce the emission of pollutants by about 25-30% and increases the efficiency of the units that use it.
The delay, the extra money and the disagreements Odysseus
The contracts for the construction of the LNG terminal were signed at the end of 2019 (despite the strong position of the Auditor General for serious illegalities in the process of evaluation and award of the tender by DEFA), for an amount of approximately €290 million, of which €100 million was sponsored by the EU. The projects were originally reported to start in September 2020 and be delivered in two years. Citing the problems caused on many levels by the pandemic, China Petroleum Pipeline Company asked for an extension, but also for additional money, mainly due to the rise in the prices of raw materials. The Government, following a decision of the Central Committee for Changes and Claims, again with the disagreement of the Auditor General, agreed to the payment of about €25 million in addition to the initial compensation. And the consortium has pledged to complete the project by July 2023... or even earlier.
In February 2021, the Minister of Energy, Natasa Pilides, stated that despite the agreement made for additional compensation to the consortium, the state will not renounce the compensation it is entitled to, under the contract, for each day of delay.
