vasiliko project — vasiliko project — The former contractor for the liquefied natural gas (LNG) project at Vasiliko has placed the blame for its failures squarely on the Cypriot side, accusing officials of incompetence and acting in bad faith.
In a comprehensive statement released on Thursday, CPP-Metron Consortium Ltd (CMC) detailed its grievances, particularly in light of recent discussions at the House energy committee regarding the project. According to CMC, they were not only excluded from the meeting but also felt misrepresented in the media.
CMC first entered into an Epcoma (Engineering, Procurement, Construction, Operation and Maintenance Agreement) with Cyprus in December 2019. However, actual work on the project did not commence until September 2020, nearly ten months later. The consortium cited two primary reasons for this delay: a lack of funds until May 2020 and significant delays in appointing the Owner’s Engineer, which only occurred late in 2020.
The Owner’s Engineer, appointed by the Cypriot government, was Hill International. CMC has raised concerns about the competence of Etyfa, the natural gas infrastructure company responsible for the project. They stated that Etyfa clearly lacked the necessary experience, claiming, “Etyfa had only one engineer on board that not only had zero experience on similar projects, but zero project experience of any kind of project.”
CMC alleged that throughout the project, Etyfa delayed payments, often using flimsy excuses. They pointed out that under the Epcoma, €60 million was due after the arrival of the vessel at the Shanghai shipyard in August 2020, but this payment was only made by the end of February 2021. Following that, the next payment did not occur until late July 2022, a staggering 16 months later.
As the project progressed, CMC claimed they were frequently forced to finance ongoing work despite this being contrary to the terms of their agreement. By January 2024, the situation had become untenable, leading CMC to suspend work. The consortium resumed operations in March 2024 after assurances from the Minister of Energy that payments would be timely, but these promises were not fulfilled, prompting CMC to terminate the project on July 18, 2024.
Further complicating matters, CMC alleged that following the termination, Etyfa failed to conduct a proper handover. They stated, “There is no single piece of paper that Etyfa confirms what they did receive and what the condition was.” In early 2021, Etyfa had also unilaterally altered the Epcoma, insisting that the jetty be cryogenic, which is only necessary for LNG export, a capability Cyprus does not currently possess. This change reportedly led to project cost increases exceeding €100 million.
CMC claimed that Etyfa refused to meet with them to address these issues, forcing the consortium to seek support from the London Court of International Arbitration in February 2023. They also dismissed accusations of using unsafe equipment, asserting that all materials had been pre-approved by Etyfa and Hill International and had undergone rigorous factory acceptance tests.
Addressing concerns regarding the floating, storage and re-gasification unit (Fsru), CMC refuted claims that the vessel was incomplete or lacking critical components. They stated that on December 9, 2024, Lloyd’s Register issued an LNGC (Liquefied Natural Gas Carrier) certificate that noted only minor outstanding works related to the jetty, which were successfully completed before the Fsru’s delivery to Etyfa.
Countering allegations that they held the Fsru vessel “at ransom,” CMC challenged the Cypriot side to produce any evidence of such claims, insisting that the vessel was ready for Etyfa to receive, but the latter delayed for 11 months. They emphasised that Etyfa was unprepared to accept the Fsru, lacking the necessary documents and certificates for its operation.
In concluding their statement, CMC expressed a willingness to engage in constructive discussions with the Cypriot government to explore potential solutions for completing the project, citing a sense of responsibility to Cypriot taxpayers.
