After a long debate, the Chinese construction company CPP-Metron Consortium Ltd (CMC) has announced the suspension of work on its new liquefied natural gas (LNG) terminal project at Vasiliko in the Limassol area.
On Thursday 18 July, the developer terminated its contract with the Natural Gas Infrastructure Company (Etyfa), accusing its partner of bullying and incompetence. Specifically, a CMC spokesman said that Etyfa had forced its employees to work for years "without proper or timely payment". In addition, Etyfa's consultants "had no relevant experience in any of the matters involved in the implementation of this project".
Our company had no choice but to terminate the contract with Etyfa. No contractor can work on credit indefinitely. These are not the terms we agreed to," CMC stressed.
It should be noted that the dispute over the development of the project lasted several months. Unfortunately, the strategic partners could not find a common denominator. Meanwhile, the Cyprus Audit Office said that serious irregularities had been committed in the implementation of the project, resulting in additional costs. According to the office, €542 million has been invested in the project since the start of the terminal's construction. At the same time, the timetable for the work kept shifting: first to September 2022, then to July 2023, October 2023 and finally to July 2024. In the end, it was never completed.
Interestingly, even the president of Cyprus, Nicos Christodoulidis, tried to solve the problem by holding a two-hour meeting with the Chinese ambassador to Cyprus. But this did not stop the CMC from taking extreme measures. Local officials were desperately hoping that the Chinese company would hand over the Prometheus, which was still in Shanghai, to the Cypriot side before making any statements. Instead, the contractor surprised the Cypriot side by suddenly announcing the cancellation of the contract without agreeing to hand over the ship.
As a reminder, the contract for the construction of the liquefied natural gas (LNG) terminal at Vasiliko was signed between the Cypriot government and an international consortium in December 2019.
The groundbreaking ceremony will take place on 9 July 2020 with the participation of former Cypriot President Nicos Anastasiades.
The project includes a floating storage and regasification unit, a berth for mooring the floating unit, isothermal gas storage tanks, an evaporation plant and an onshore pipeline. The idea was to import natural gas to Cyprus in liquefied form, convert it to a gaseous state (regasified) in LNG and then use it to run power plants.
The terminal was originally due to be completed by the end of 2021, but this was pushed back to the end of 2022 and the beginning of 2023. In the end, no one could give an exact completion date for the project.
It is worth noting that the use of natural gas instead of fuel oil would reduce Cyprus' carbon footprint by almost 30 per cent and reduce electricity generation costs by 15-25 per cent or even more, as the electricity market would become competitive.