Filenews 19 May 2024 - by Chrysanthos Manoli
The huge fiasco surrounding the ambitious project of building a natural gas regasification terminal in Vasilikos is also testing relations between Cyprus and China at the highest government level.
Phileleftheros reports that President Christodoulides invited China's ambassador to Cyprus to a meeting tomorrow at the Presidential Palace, apparently to protest against the stance of the Chinese state-owned company CPP regarding the execution of the contract signed with the state-owned ETYFA for the import of liquefied natural gas into Cyprus.
The Chinese state-owned company CPP appears unwilling but also unable to complete the project of constructing the pier in Vasilikos, where the floating gas storage and regasification unit "Prometheus" will dock, so that liquefied natural gas (LNG) carriers can approach for unloading.
In its announcement on Friday evening, CPP states that the situation as it stands is unsustainable for itself, sending a clear message to the Republic of Cyprus that it will not resume the Vasilikos works unless its additional financial demands are met, which are deemed outrageous and unquestionably unacceptable by the Republic of Cyprus and its legal and technical advisors.
Before the Arbitral Tribunal in London, CPP has filed a claim for additional damages from the Republic of Cyprus amounting to EUR 200 million. euro! It argues that ETYFA, DEFA's subsidiary that manages the execution of the Vasilikos projects, is not cooperative and has also upgraded its requirements for the pier, adding demands for the addition of expensive and time-consuming cryogenic technology. so that the pier can be used BOTH for the import and regasification of natural gas AND for the export of Cypriot liquefied gas.
Bad faith or weakness
The Cypriot side (Ministry of Energy, DEFA, ETYFA) replies that the contract signed by the two sides in 2019 clearly provides for the installation of cryogenic technology for natural gas export purposes if and when such prospects arise. It also argues that any belated objections by CPP to the content of its contractual obligations are due either to bad faith or to its inability to fully understand the terms of the contract. Or in financial inability to cope.
On behalf of the Government, the question is being asked behind the scenes "if ETYFA's demands were so far from the terms of the contract, why did CPP not react two or three years ago, but only do so in 2024, five years from the beginning of the cooperation between the two sides?"
What are we going to say to the EU?
Now only one step away from the collapse of the cooperation with CPP and the new multi-year postponement of the import of natural gas for cheaper electricity production and drastic reduction in the cost of purchasing pollutants from consumers, the Government has sounded the alarm at the highest level. The LNG terminal project was funded by the EU with €101 million. The Commission is monitoring it closely.
Moreover, the finalization of the divorce with the Chinese state-owned company will send the extremely important project in Vasilikos to the Greek calends, at an incalculable financial cost to the state. More than €300 million has already been paid without Cyprus having gas and consumers will be condemned to pay €200-300 million per year for the purchase of greenhouse gases (the cost goes up and down depending on the tricks of the Commission and the "market").
And the ship?
In addition, a major asset is the Prometheus floating natural gas regasification plant (FSRU), for the construction of which Cyprus (ETYFA) has already paid around €200 million. But it remains in Shanghai because Lloyd's Register does not give its permission to sail to Cyprus, to which it belongs, due to some additions that the Chinese have to make.
AND if the terminal is "frozen" AND the ship remains (like loot) in the hands of the Chinese state-owned company, we will be talking about a slap in the face of gigantic situations for the Cypriot state, with the responsibility falling primarily on the Anastasiades administration that trusted the Chinese company despite the written objections of the Auditor General and the absence of real competition in the tender that was announced in 2018 and the Chinese Government itself. which has the first say on the management exercised by the State CPP.
The meeting tomorrow at President Christodoulides' Presidential Palace with the Chinese Ambassador aims to send the message to the Chinese Government that it is not considered blameless for the fiasco that is in full swing, as it failed – despite repeated urgings by the Cypriot Government – to ensure the compliance of a state-owned and fully controlled company with its contractual obligations. ultimately exposing the Cypriot Government to its citizens but also to the EU, which granted the project €101 million.
