Filenews 23 July 2024 - by Chrysanthos Manoli
The Government is making moves in various directions to ensure that work is activated as soon as possible on all sections that make up the Vasilikos natural gas regasification terminal.
The delivery of the FSRU floating unit from Cosco's shipyard in Shanghai is a priority and in this direction various actions have been promoted so that the ship is staffed by trained personnel and sails to the Mediterranean.
However, there is currently no indication of CPP's stance, although its termination of the contract that bound it to ETYFA may also alter its legal relationship with the Prometheus FSRU. CPP is still claiming a sum of approximately EUR 35 million. euros for work on board, but ETYFA considers these requirements unjustified. On the other hand, officials in Cyprus are concerned by the financial differences that appear to exist between CPP and Cosco, the company that converted the LNG Carrier GALEA into an FSRU. If Cosco considers that there are unpaid accruals, it may demand that it be paid before Prometheus leaves the shipyard.
Plan B
The President of the Republic yesterday referred to a plan b regarding the use of FSRUs for the regasification of natural gas and the operation of the terminal. He specifically said that "we have already made specific planning, Plan B, in case these discussions, which are currently ongoing, do not work."
Phileleftheros reports that plan B referred to by Christodoulides is linked to the alternative option of renting another floating FSRU unit, in case it becomes apparent in the coming days that CPP will want to extend for an indefinite period of time the entrapment of the Cypriot ship, while prolonging the delay in the operation of the terminal and the arrival of natural gas for electricity generation. Renting an FSRU is technically a workable solution that could prevent a prolongation of stagnation, but it will inevitably be a costly option, even if the government insists that the operation of the terminal and the arrival of natural gas will outweigh any additional infrastructure costs.
Offers and works on the pier
The government is reportedly considering seeking offers to rent FSRUs if it appears that Prometheus will get stuck in legal or other delaying tactics by CPP.
However, in order for the FSRU rental to be meaningful and operational, work on the pier and the onshore part of the terminal must proceed quickly. ETYFA has already activated the provisions of the initial contract with CPP, which was judged by the legal advisors to allow the continued exploitation of the subcontractors who worked on the pier and the onshore works under an agreement with the Chinese company.
The two subcontractors used by CPP (Multimarine Services and Spanopoulos Group) maintain in Vasilikos and Limassol port the necessary equipment used during their cooperation with CPP, so their reactivation, on behalf of ETYFA, can now be done quickly. Both subcontractors have assured the state side that they are ready to resume work immediately and we are informed that a significant part of the concrete constructions necessary for the pier are already ready and are waiting for their transfer by boat to Vasilikos at the port of Limassol, once the cooperation with ETYFA is finalized.
President said so about CPP
Many people said it a long time ago, including the Auditor General, but yesterday the President of the Republic said it very clearly, leaving the previous Government, of which he was an influential member, exposed: "The first thing I want to say with absolute certainty is that this company should never have been given this particular project", said Nikos Christodoulides. As a result, he added, he cannot implement it.
However, he assured that the terminal will be implemented, as it is one of the pillars of the Government's plan to reduce the price of electricity. He also referred to an alternative plan that the Government is preparing to move for the operation of the gas terminal even if something goes wrong with the delivery of the Prometheus floating unit.
Subcontractors also take CPP to court
VPSM Joint Venture Ltd (VPSM) made an announcement yesterday in response to the announcement of the CPP-Metron Consortium Ltd ("CMC") dated 21/7/2024, in which the Chinese contractor who abandoned the LNG terminal project in the middle after delays of at least two years tried to dismantle the companies that had been hastily recruited by him and temporarily pulled work on the pier out of the maze of delays.
According to VPSM's announcement, the content of CMC's Sunday announcement does not correspond to reality and is part of its broader effort to undermine the continuation of the project.
The VPSM consortium consists of IM Spanopoulos Special Marine Operations Ltd and Multimarine Services Ltd, companies that have always been reliable in the award and execution of major projects internationally, which bear their stamp.
VPSM has the required know-how, the experienced and well-trained human resources, as well as the necessary mechanical equipment (floating and shore equipment) to execute the project assigned to it as a subcontractor of CMC and was and remains able to proceed diligently with its completion.
Regarding the dispute that arose between CMC and VPSM, we note the following: VPSM's works were proceeding as agreed and with a planned delivery time in 2024, when at the beginning of the year, and citing financial differences with ETYFA, CMC decided to suspend the works of the project. While the project was suspended and without foundation, CMC unlawfully and unconventionally attempted to terminate the subcontracting agreement between CMC and VPSM ("Agreement") by making untrue and unsubstantiated allegations.
VPSM called on CMC to revoke its unlawful notice of termination and continue with the execution of the agreement. CMC failed to comply, effectively insisting on the unlawful notice of termination, despite VPSM's requests to the contrary, which left VPSM no choice but to terminate the agreement due to CMC's sole fault, which it did. Please note that CMC owes significant amounts to VPSM as payment balance for work performed. These amounts, as well as compensation for damage caused to VPSM as a result of the early termination of the Agreement, have already been claimed under the terms of the Agreement.
In the event that CMC fails to comply with its obligations, VPSM will take legal action to defend its rights."
