Filenews 16 February 2024 - by Chrysanthos Manoli
Expressing indignation over what was said during yesterday's closed-door session of the parliamentary Control Committee on the long delay in the implementation of the import of liquefied natural gas to Vasilikos, AKEL MP Irene Charalambidou said in conclusion that "we live with hope, basically to see what will emerge and how it will emerge".
Her report seems very apt, as neither the Government, nor ETYFA, nor perhaps the contractor know if, how and when the works in Vasilikos will resume and proceed, when they will be completed, when the floating FSRU unit will be delivered to the Republic and when natural gas will be used for electricity production.
It is also worrying to note that a direct communication channel between the government side and the contractor does not seem to exist, hence no substantial development has been recorded for about a month when work was suspended.
The Minister of Energy left on the table yesterday both options that exist: Either a consensual solution will be found in negotiations with the Chinese CPP and the contractor will proceed to the completion of the project, at the end of 2024 or in 2025, or the Government will take the (bold, as the minister described it) decision for divorce, velvety or episodic, and will look for other contractors to finish the job. Unknown when and unknown at what additional cost.
However, even if the scenario of an agreement for the continuation of the project by CPP is implemented, the Republic of Cyprus will hardly avoid incurring additional costs (how else will CPP consent?), but in the hope that this will be substantially lower than the EUR 200 million. claimed through arbitration by the Chinese company. At one point of view of the table are all 67.5 million euros. euros to which the Republic of Cyprus is entitled under the contract for the maximum of recognized arrears, with a starting date of their calculation in September 2022.
During yesterday's meeting of the Audit Committee, the discussion of the Auditor General's special report on the procedures for awarding the offer to CPP and its partners and the incomplete, until recently, monitoring of the project by ETYFA continued.
The meeting was attended, among others, by the Minister of Energy during the period of award of the tender, George Lakkotrypis, who cited the position of the then Attorney General Costas Clerides that there was no legality issue preventing the award of the project, following a tender announced by DEFA-ETYFA. Mr. Lakkotrypis explained that the competent authorities were faced with a dilemma at the time, as a possible acceptance of the proposal of the Auditor General of the Republic to cancel the tender and announce another, would lead to a new long delay. However, this was de facto not avoided, mainly the responsibility of the contractor, despite the signing of the agreement disputed by the Audit Office at the time.
Former Energy Minister Natasa Pilides said after the session that during her tenure everyone worked to safeguard the public interest, which was achieved under the circumstances, according to her. He added that if problems now arise at the stage of the project, it is up to the minister and the new government to take the decisions to move forward...
We were left wondering about Saturn 2
The Ministry of Energy, ENI and Total announced yesterday that the works of the "Cronos-2" evaluation drilling, within Block 6 of the Exclusive Economic Zone (EEZ) of the Republic of Cyprus, have been successfully completed by the consortium of Eni Cyprus Limited (Operator) and TotalEnergies EP Cyprus B.V.
However, both the ministry's announcement and ENI's announcement avoid mentioning the discovery of a new separate deposit (Saturn 2) or new quantities of gas, in addition to those estimated in the Saturn 1 deposit (about 2.5 trillion cubic feet).
The drilling, which took place at a distance of 160 km from the coast of Cyprus and 3 km from the initial exploratory drilling "Cronos-1", demonstrated the existence of the same gas column, with a production zone within a geological formation exceeding 115 meters. He confirmed that this is an extension of the "Cronos" deposit, with the same characteristics in carbonate rocks.
