Filenews 11 June 2024 - by Chrysanthos Manoli
The President of the Republic recently argued that a velvet divorce with the Chinese CPP is not in the state's intentions, but the reality, as it stands, leads to the conclusion that the termination of cooperation between the two sides is the only way out to proceed with the completion of the Vasilikos terminal and the arrival of natural gas for electricity generation.
As Phileleftheros rewrote, in order to break the cooperation and disengage ETYFA from the impasse, it is necessary to receive the floating natural gas regasification unit (FSRU) from Shanghai and sail to Cyprus. However, in order for CPP to consent to the delivery of the ship into Cypriot hands, it requires the payment of €32 million. Which, however, according to the Cypriot side, are not justified either by the contract or by the financial pending issues between the two sides.
Given the provisions of Cypriot law, the payment of €32 million will be made to the Member States. It seems difficult to do without approval from the Central Committee for Changes and Claims (KEEA), as was the case with the €25 million that were given to the Chinese three years ago, when they cited additional costs due to increased raw materials during the coronavirus pandemic. In the case of the ship Prometheus, however, the justification for the additional payment of €32 million seems difficult to justify before the CEEA.
The Department of Energy and ETYFA are working to find a way to pay part of CPP's claims and make a final set-off of ETYFA's and CPP's claims when the arbitrator in London reaches a decision.
As we pointed out again, the government has now turned all its attention to acquiring possession of the Prometheus FSRU and transferring it to Cyprus or to a shipyard of an EU member state, until the works on the pier in Vasilikos are resumed by subcontractors leased by ETYFA. The possibility of CPP continuing the projects is very remote, if not unlikely.
This morning, developments regarding the LNG terminal and the electricity interconnection between Cyprus and Greece will be discussed during a meeting of the parliamentary Committee on Energy.
The briefing to MPs will be mainly done by Energy Minister George Papanastasiou.
Regarding the terminal in Vasilikos, Papanastasiou had stated in early June that from the contacts that the contracting parties have, but also from his own personal contacts at diplomatic and political level with the Ambassador of China, "there is some light on the horizon" regarding the terminal in Vasilikos. F's information, however, indicates that the light on the horizon is primarily about the prospect of a mutual consent contract termination with CPP and completion of the pier by other companies, rather than an agreement to resume work by the Chinese company. A divorce agreement should include handing over the Prometheus FSRU to ETYFA and awaiting the decision of arbitration in London to settle financial disputes between the two parties.
Pantelis in Parliament on the interconnection
Regarding the Great Sea Interconnector, the preliminary results of the cost-benefit study of the project, prepared by EXEGIA on behalf of the Independent Power Transmission Operator (ADMIE), show significant savings in electricity costs after the operation of the interconnection, but the Ministry of Energy has clarified that the Republic of Cyprus will not financially support the project with a grant of €100 million. It will not acquire shares in the special purpose vehicle for the execution of the project unless the final design is delivered and if it is not evaluated by a foreign firm. The study will also be evaluated by other government authorities, including EAC.
Of particular interest is the participation in today's session of George Pantelis, Permanent Secretary of the Ministry of Finance, who reportedly has several concerns about the viability of the project and its usefulness in Cypriot electricity production, given other costly investments made or being promoted.
