The Vasiliko LNG project has seen renewed hope as Energy Minister George Papanastasiou expresses cautious optimism about its future. Following a period of delays, the government’s new consultants may provide a path forward without necessitating a complete redesign of the terminal.
Vasiliko lng: Consultants’ Report on Project Viability
In an interview with Stockwatch, Papanastasiou shared insights from the government’s new consultants, Technip Energies. The minister indicated that they would likely conclude that the issues identified in the initial technical design carried out by the Chinese consortium, CPP, are not too significant. This assessment could allow for the continuation of the project without starting from scratch.
Papanastasiou stated, “We have information that the consultant, Technip Energies, will conclude that the omissions and gaps in the technical design done by the Chinese consortium are not too serious and as such the completion of the project can proceed.” The report from Technip is expected to be delivered to the government by mid-December, detailing what works remain and their associated costs.
Possible Timelines and Next Steps
Should the report confirm that the deviations in the project are manageable, Papanastasiou believes the LNG terminal could be completed within a 15-month timeframe. “From the moment we push the button, the project will be ready in 15 months, assuming that the Prometheas ship is already certified and can operate as a floating storage and regasification unit,” he explained.
The Prometheas vessel is crucial to the project. Papanastasiou noted that the ship’s conversion to function as an FSRU is nearing completion, with a decision from Etyfa, the state-run natural gas infrastructure company overseeing the project, expected soon regarding the ship’s anchorage location.
Challenges and Financial Implications
The minister highlighted that if the project must be redesigned entirely, the timeline for completion would extend significantly. In such a scenario, the Prometheas would need to dock at an alternative port equipped to handle LNG conversion, with options available in Greece, Italy, and Egypt.
The urgency of the situation has been exacerbated by a demand from Brussels for Cyprus to refund €67.2 million in grants linked to the LNG terminal. This refund request stems from irregularities flagged by the European Commission concerning the awarding of the contract to the Chinese-led consortium in December 2019. The contract was ultimately abandoned in July 2024 due to irreconcilable differences, leaving Cypriot authorities to seek new subcontractors to complete the onshore facilities and jetty.
Future Prospects for the LNG Project
As the government awaits the findings of Technip Energies, the future of the Vasiliko LNG project hangs in the balance. The potential for movement forward without requiring a complete redesign is a relief to officials who have faced mounting pressure from both domestic and international stakeholders.
In light of recent developments, the focus now shifts to the timely delivery of the consultant’s report and the subsequent actions taken by the government. If the least-worst scenario unfolds, it may pave the way for a revitalisation of the LNG terminal project, which is seen as vital for Cyprus’s energy future.
