High-ranking official of consortium building Cyprus' LNG terminal to visit the island

A high-ranking official from the consortium assigned to build Cyprus’ Liquefied Natural Gas (LNG) Receiving and Regasification Terminal in Vasilikos will be in Cyprus within the week to meet with government officials, according to Energy, Commerce and Industry Minister George Papanastasiou.

He also said that the government will ask for a timeframe to be set for consultations between the parties, making clear that if there is no positive outcome, it should be jointly decided to end the cooperation.

There have been delays in the completion of the construction of the LNG import infrastructure at Vasilikos, in the Larnaca district. The project also includes the delivery of a floating storage regasification of LNG unit (FSRU).

The Natural Gas Infrastructure Company of Cyprus (ETYFA Ltd) has signed an EPCOM (Engineer, Procure,Construct, Operate and Maintain) type of contract with a consortium comprising of China Petroleum Pipeline Engineering Co. Ltd (CPP), Metron Energy Applications S.A., Hudong-Zhonghua Shipbuilding (group) Co. Limited and Whilhelmsen Ship Management Limited. The Contractor consortium is represented by CPP-METRON Consortium Ltd (CMC Ltd), a registered in Cyprus company, that has signed an Agency Agreement with (the Contractor) and acts on its behalf.

This project aims at the construction of the Liquefied Natural Gas (LNG) Receiving and Regasification Terminal in the Vasilikos area, for importing natural gas on the island of Cyprus and facilitate its use mainly for power generation purposes but also for other future industrial and urban uses. Natural gas (re-gasified LNG) will be supplied initially to the EAC Vasilikos power station.

In his statements to journalists, Papanastasiou said that his Ministry was making efforts through the Ambassador of China in Cyprus, noting that there was “productive dialogue” at that level.

He added that there will be a visit, expected to take place this week, of a high-ranking executive of the consortium, and more specifically of the CPP, the Chinese company that is part of the consortium, noting that the Government will raise some issues with them. He pointed out that works for the terminal have stopped and “we want to know what the company's plan is, its demands”. Although, he said, they already know them through another process which is taking place, in parallel.

“We will state our positions, we will set some conditions”, he said, adding that it was urgent that the company resumed works for the construction of the land terminal located in Vassiliko.

Regarding the floating unit (for the import, storage and regasification of LNG), he said that the government needed to know when it would receive its certification so that the competent authority of the Republic of Cyprus, the Natural Gas Infrastructure Company (ETYFA), could receive it.

Our efforts, he said, are focused on consulting at the political and technical level directly with the consortium, but if there is no positive outcome within a set timeframe that he will propose to be set by the two parties, “then, we will have to jointly decide for the termination of this cooperation”, so that the Republic of Cyprus “is not held hostage” to an arrangement which cannot proceed.

In such a case, he added, his Ministry was ready to proceed with a “plan B” in order to implement this project “which is very important for the country”. He said that this terminal was the fastest way to import natural gas for power generation, noting that the country must “urgently” change conventional power generation, because it needs to reduce pollutants. Liquefied natural gas is at very low prices in the markets today, he said, noting that “it would be a dream come true if we could have that particular terminal to bring in cheap fuel and, at the same time, reduce pollutants”.

“In other words, the cost of conventional electricity, which is the reason why we have high electricity prices in Cyprus, would be much lower”, he said.

Asked about the timeframe, he said this an issue of internal consultation, but it shouldn’t last for too long. This cannot be an indefinite discussion, he said, adding that, the two parties should agree that, by a certain date, they should come to an end, “to agree that they agree, or to agree that they disagree”.

(Source: CNA)