Construction of the new liquefied natural gas (LNG) terminal in Vasiliko has been put on hold once again. On Tuesday, July 8, during a meeting of the Parliamentary Committee on Energy, it was revealed that the main reasons for the delay are protracted bureaucratic procedures, a lack of key technical components, and uncertainty with the new contractor. ETYFA, the state operator of the project, is expected to present the Cypriot government with an updated schedule for completing the work and the terms of a new tender for constructing the onshore infrastructure only by March 2026.
The project is only 50% complete
Energy Minister Yorgos Papanastasiou and other officials presented updated information on the project's progress to MPs, who sharply criticized it. One of the main surprises was the situation with the Prometheus vessel, which is still in Malaysia. It was revealed that the Chinese contractor had failed to install two essential components: a valve system for gas liquefaction and a nitrogen generation unit. These components are estimated to cost €8–9 million. The government intends to recover this amount through arbitration in London. As for the land-based part, construction of the terminal and pier is far from complete.
The vessel's downtime costs €367,000 per month
It costs Cyprus €367,000 per month to maintain the Prometheus in the Malaysian port. This sum covers management company services and port fees, causing considerable discontent among MPs and the public. Additionally, contrary to previous statements, the vessel will not be certified as a gas carrier. This means its return to Cyprus will be delayed; final certification is not expected until September 2025, with an expected arrival in October.
New consultant and legal maneuvers
To speed up completion of the onshore infrastructure, the government hired a French consulting company experienced in reviving frozen projects. The company has already begun analyzing the terminal and pier where Prometheus will be moored.
Interestingly, the authorities are negotiating with a subcontractor of the Chinese consortium despite previous statements about the impossibility of such cooperation. ETYFA claims to have found legal grounds for this step.
The project was "inherited with problems."
During a meeting of the Parliamentary Committee on Energy, deputies expressed concern about the project's slow implementation. In response, the minister acknowledged that the project was inherited with significant issues and poor decisions, including the selection of the contractor and ambiguous contract terms. He stressed that such a project would be unlikely to be approved today. Papanastasiu stated that if the terminal had been handled by the private sector, it would have been completed within a year. However, due to public procurement, the deadlines have been significantly delayed.
"If we were launching the project today, the earlier decisions would definitely not have been made," Papanastasiu said. "Dubious contracts, weak control, and lack of transparency are mistakes that we will not repeat," said Papanastasiu.
Chronology of the Failure
The project began in 2019 with the signing of a contract with the Chinese consortium CPP-Metron Consortium Ltd. (CMC). The completion date was postponed several times, first from 2022 to 2023, then to October 2023, and finally to July 2024. After CMC's contract was terminated in 2024, it became clear that only half of the construction had been completed, and the actual launch date was unknown.