Filenews 12 June 2024 - by Chrysanthos Manoli
From what Energy Minister George Papanastasiou said yesterday, inside and outside the meeting of the competent parliamentary committee, there is no doubt that all the attention of the Government on the project of importing natural gas to Vasilikos is now focused on the delivery of the ship Prometheus from the Cosco shipyard in Shanghai. However, the vessel will not be delivered by CPP until the financial accounts that the Chinese company considers to have with ETYFA are closed.
And as we wrote yesterday, the outstanding amount is €32 million, according to the Chinese state-owned company.
Although the energy minister yesterday asked the members of the competent parliamentary committee to hold the meeting behind closed doors, as a case is pending in the arbitration court and he did not want sensitive information to be leaked, the information available states that nothing really new was said in the room.
Papanastasiou, speaking to reporters after the meeting, refrained from saying categorically that there is no prospect of continuing cooperation with CPP on the horizon. He said that all possibilities are on the table, but behind the lines it is clear that Papanastasiou does not look forward to the implementation of the contractual obligations of the Chinese company for the Vasilikos projects.
What is delaying the official divorce is the inability to reach a financial settlement for the delivery of the floating gas gasification unit into Cypriot hands. And as long as the two sides do not come to terms about the future of the Prometheus FSRU, the pending issue will remain and CPP's contractual obligations will continue to run legally. Therefore, the period of delay in the execution of the projects will also increase, a factor that is likely to cost the Chinese company in the end, before the arbitration court in London, as the delay entails serious financial damage for the Republic of Cyprus.
Unjustified claim, says ETYFA
As Phileleftheros wrote yesterday without being denied, CPP is demanding an amount of €32 million for the release of the ship, but the claim is rejected by ETYFA as unjustified. In addition, the Cypriot side argues that for the full completion of the works on the ship – so that it can be certified as both a liquefied natural gas carrier and a floating regasification plant, specific works are pending, the cost of which is around €20 million.
In order to pay any amount exceeding the financial agreement in the contract signed by the two sides in 2019, a decision of the Central Committee for Changes and Claims (KEEA) must be preceded. And given that ETYFA does not consider – in the context of its negotiations with the Chinese – that the amount requested is justified, it follows that the state-owned company cannot support such a request before the KEEA, even if it is argued that it is better served in the public interest if this amount or part of it is paid, than if the pending and hostage holding of the ship in Shanghai is maintained.
What is being considered is the possibility of agreeing an amount to be paid to CPP for the issues it raises in relation to the ship, but that this amount will be part of the ongoing arbitration in London. In such a way that the final decision whether the money that may be given today by ETYFA was correctly demanded by CPP is taken by the arbitrator. Otherwise, they will have to be returned or offset will be made during the final financial settlement that will be decided, as serious financial claims of both ETYFA and CPP are before the arbitration.
Decree by court?
On the table, as a legal possibility of the Republic, remains the appeal to the International Court of Arbitration, with the sole request for the issuance of a decree for the delivery of the ship to its owner, namely ETYFA. This, however, would obviously take time and further aggravate relations with CPP and/or the GOC.
The Energy Minister said yesterday that the intention of the Cypriot side is to clear up the pending issue around the Prometheus FSRU within June. If this is achieved, then it opens the way for the two sides to sign a mutual consent to terminate their cooperation and wait for the final decision from the arbitration on the rest.
As regards the works for the terminal pier and onshore facilities, no development should be expected unless there is agreement on the fate of the ship. If there is an agreement, it will pave the way for the work to be outsourced to other contractors.
