Cyprus has taken another step towards completing one of its largest energy infrastructure projects in recent years. State-owned company ETYFA has launched a new international tender to complete the liquefied natural gas (LNG) import terminal in Vasilikos. The remaining works are estimated to cost €180 million, with the contract scheduled to be completed within 24 months.
The project is considered critical to the country's energy security. Once the terminal becomes operational, Cyprus will be able to replace more expensive liquid fuels used for electricity generation with natural gas, which is expected to reduce power generation costs and lower carbon emissions.
Tender Details
The tender is being conducted through a restricted procedure with a pre-qualification stage. Construction companies must first submit applications to participate, after which only shortlisted candidates will be invited to submit technical and financial proposals. The key deadlines are:
- requests for clarification will be accepted until 26 August 2026;
- the deadline for submitting applications is 9 September 2026 at 12:00 noon.
The winning bidder will not be selected solely on the basis of the lowest price, but according to the best value-for-money criterion. Technical solutions, the contractor's experience and financial terms will all carry equal weight during the evaluation process. The scope of works includes completing the LNG terminal, constructing gas infrastructure, building marine facilities, providing engineering support and technical supervision, and carrying out specialised construction works for the oil and gas industry.
Why the Project Has Been Delayed for Almost Two Years
Construction of the terminal was originally awarded to the Chinese company CPP-Metron Consortium Ltd (CMC), which won the tender in 2019. However, on 18 July 2024, the contract was terminated due to numerous issues with project execution. The dispute is currently being heard in international arbitration in London, where the Chinese contractor has also filed financial claims of its own.
Additional complications have arisen in relations with the European Commission. Brussels has requested the repayment of €67 million previously allocated to the project, citing irregularities in the original procurement procedure. Recovery proceedings have already been initiated, although no final decision has yet been made. The project's initial funding was approved in January 2018, when the European Commission granted Cyprus up to €101 million, covering approximately 40% of the eligible costs. Since then, construction costs have increased significantly.
What Has Already Been Built and When the Terminal Will Become Operational
The Vasilikos LNG project consists of three main components:
- a Floating Storage and Regasification Unit (FSRU);
- a permanent offshore jetty;
- onshore infrastructure to deliver natural gas into the national energy system.
The floating terminal Prometheas had already been fully completed by February 2026 and was located in Malaysia. However, the vessel cannot begin operations until the onshore infrastructure has been completed and the required certifications have been obtained. Completing these remaining works is the main objective of the new tender.
The €180 million budget applies only to the unfinished portion of the project. It does not include the cost of the vessel itself, works already completed, or any potential payments resulting from the ongoing arbitration proceedings. Cypriot analysts have previously warned that the final cost of completing the project could significantly exceed the original estimates.
Why the Vasilikos LNG Terminal Is So Important for Cyprus
Today, almost all electricity in Cyprus is generated using imported liquid fuels, making electricity prices among the highest in the European Union. The LNG terminal will enable the country to switch to natural gas, which is considered both cheaper and more environmentally friendly. Through ETYFA's infrastructure, licensed electricity producers will be the first to receive natural gas, after which it will also become available to other major industrial consumers.
The authorities have not yet announced an official commissioning date for the terminal. During a meeting of the Parliamentary Energy Committee in February 2026, the government did not present a final implementation timetable. If a new contractor is selected without further delays, construction is expected to be completed approximately two years after the contract is signed.
Experts believe that successfully completing the project will mark one of the most significant milestones for Cyprus' energy sector. In addition to strengthening the island's energy security, the terminal will diversify fuel supplies, accelerate the transition to cleaner electricity generation and provide the foundation for the further development of the country's natural gas infrastructure.