Filenews 1 June 2024 - by Chrysanthos Manoli
Phileleftheros' latest reports indicate that the Cypriot government and the Chinese state-owned company CPP have fully come to terms with the idea of a velvet divorce and give the impression that they are working... harmoniously in this direction.
In order to somehow agree on the termination of the cooperation regarding the remaining projects for the Vasilikos terminal, the floating gas storage and regasification unit (FSRU) will have to be handed over to its owner, namely the state-owned ETYFA.
Earlier information in our newspaper that the Chinese side has made financial demands for the delivery of the ship is confirmed. The exact amount requested by CPP has not been confirmed, but it concerns a few tens of millions of euros, in addition to the approximately €190-200 million that have been spent so far by ETYFA for the conversion of the ship-carrier Galea to the FSRU Prometheus.
The Cypriot side does not consider the new demands of the company to be justified. On the other hand, the rejection of claims at this stage may jeopardize the acquisition of possession of the ship by ETYFA.
Intensive consultation should be expected in the coming days to find a compromise, exclusively on the FSRU.
CPP does not seem to accept the option of waiting for the arbitrator's decision in London on all aspects of the dispute, handing over the vessel to ETYFA. And the Cypriot company, for its part, does not accept to pay what CPP claims, without a prior decision of the arbitrator.
What the legal advisors of the two companies will seek is a settlement that will take into account the financial claims of the Chinese (for the ship only), but also ETYFA's desire that any final financial burden, beyond the provisions of the initial contract, be based on a decision of the arbitrator and not on bilateral negotiations.
If the settlement for the ship is reached, the rest seems to be... easier now. As we wrote before, neither CPP wants to return to the Vasilikos construction site and get back to work on the pier, nor does ETYFA want to relive the adventure of sewing – unravelling with the people of the Chinese company.
Therefore, what should be expected is an agreement to dissolve cooperation regarding the Vasilikos projects, provided, we repeat, that an understanding will be found for the delivery of the ship to Cypriot hands.
Should the divorce occur, the financial disputes of the two parties (claiming many millions from each other) will be left to be resolved through an arbitration decision. Therefore, it is of particular importance for everyone to continue and conclude arbitration in London.
Beyond that, ETYFA will look for another contractor to complete the pier and other works onshore, so that the terminal – with the addition of the FSRU – can operate at some point.
