After long negotiations, the CPP-Metron Ltd (CMC) consortium resumed work on the massive project on Saturday, March 16.
Experts from China are expected to arrive on the island soon to participate in the construction of a Liquified Natural Gas (LNG) terminal at Vasiliko.
The Cypriot side said it would provide the foreigners with all the necessary conditions for smooth work. This includes work visas.
CMC would like to assure the government that it will mobilize all resources to complete this important project for the benefit of all citizens of Cyprus," CMC management stressed.
The contract for the construction of the LNG terminal in Vasiliko was signed in December 2019.
The foundation stone laying ceremony took place on July 9, 2020, with the participation of Cyprus President Nicos Anastasiades.
The project includes a floating storage and regasification unit, a berth for mooring the floating unit, isothermal gas storage tanks, an evaporator system and an onshore pipeline. Natural gas, which they want to import to Cyprus in liquefied form, is planned to be converted into a gaseous state (regasified) in LNG and used for power plants. By the way, about 25 companies have already expressed interest in supplying natural gas to Cyprus.
The cost of construction of the new terminal in Vasiliko is estimated at 290 million euros, 101 million euros of which was allocated by the European Union under the Connecting Europe program, the remaining funds were received in the form of low-interest loans from the European Investment Bank and the European Bank for Reconstruction and Development.
Initially, the construction of the terminal was planned to be completed by the end of 2021, then the work schedule was shifted to the end of 2022 and the beginning of 2023. In the end, no one can name the exact date of the project delivery. By the way, in February it became obvious that the liquefied natural gas terminal in Vasiliko will not be completed even in 2024. And the work itself is being done with serious irregularities.
Switching power plants to LNG was one of the key factors in lowering the price of electricity and reducing harmful emissions, for which the residents of Cyprus pay 300 million euros of tax per year. Using liquefied natural gas would have reduced the figure by 40%. But earlier this year, flaws in the project's implementation surfaced. Energy Minister Yorgos Papanastasiou announced that the contractor requires another 200 million euros to complete the work. And their completion has been delayed again.
Meanwhile, a state audit showed significant flaws in the tender process and the awarding of the state contract in 2019. The problems were reported by the accountant general and auditor general five years ago, but only now are they being seriously talked about. Yorgos Papanastasiou reported that the land terminal at Vasiliko is only 45-50% ready. The floating unit, which is being built at a shipyard in China, is 95% complete. It too has had deficiencies, which the company has acknowledged and is going to correct. The Ministry considered canceling the contract with the contractor, but the contractor threatened legal action. After long negotiations, the Cypriot government and the CPP-Metron Ltd consortium managed to reach a consensus.