vasiliko lng — The government is engaged in damage limitation following reports of serious safety issues regarding the construction of a liquefied natural gas terminal at Vasiliko, according to Energy Minister George Papanastasiou.
- The contract for the LNG project was originally signed in December 2019, with an expected completion time of 22 months. As delays continue to mount, the future of the terminal remains uncertain.
His remarks came after Omega television reported on Friday that the project is facing significant design and materials issues. A source quoted by Omega indicated, “There are very serious technical issues, which make it impossible to continue the work at this time.” This has resulted in construction at the pier being stalled for months, with no clear timeline for completion provided by authorities.
Papanastasiou noted that a comprehensive report is being prepared by the project coordinator, which will be submitted to the natural gas infrastructure company Etyfa or directly to him early next month. He stated that this report will inform the next steps and any necessary corrective measures, which could involve substantial financial implications for taxpayers.
Amid intense concern within the energy ministry, which has had to manage inherited problems, the urgency to complete the LNG terminal remains high. However, if the forthcoming report suggests that the project cannot proceed as currently planned, Papanastasiou has committed to taking the necessary actions, including identifying those responsible for the issues.
In a recent statement, he confirmed that the report would be completed soon and that accountability for the problems at Vasiliko would be established. Previously, Papanastasiou had projected that the terminal would be finished by the end of this year, but the recent developments indicate yet another setback for a project already marred by complications.
Last year, construction came to a halt when the CPP-Metron Consortium (CMC) terminated its contract with the government, citing a lack of proper payments and support from Etyfa. CMC accused Etyfa of creating a hostile working environment, stating that the company and its advisers lacked the necessary experience for a project of this scale.
They expressed frustration over ongoing delays, with CMC claiming, “The position has become untenable. Contrary to the promises made by the [energy] minister in March, CMC has still not received any payment whatsoever for its work in 2024.” This ongoing financial strain has left CMC unable to continue work under the original terms agreed upon.
Compounding the challenges, the floating storage regasification unit (FSRU), a critical component of the project, is currently undergoing modifications in Malaysia after being delayed in Shanghai. Papanastasiou indicated that necessary changes are being made to prepare the vessel for its intended function.
In July last year, the European Commission issued a demand for Cyprus to repay nearly €69 million in grants allocated for the terminal. This demand stemmed from allegations of irregularities during the tender evaluation process, including violations related to the awarding criteria and the signing of additional funding agreements.
Further complicating matters, the European public prosecutor’s office (EPPO) has launched an investigation into potential procurement fraud, misappropriation of EU funds, and corruption linked to the Vasiliko LNG terminal project. This scrutiny adds another layer of complexity to an already troubled initiative.
The contract for the LNG project was originally signed in December 2019, with an expected completion time of 22 months. As delays continue to mount, the future of the terminal remains uncertain.
