MPs see Vasiliko problems ‘with own eyes’

MPs on Tuesday demanded an explicit timetable for the completion of the stalled LNG import project at Vasiliko, while the state-run entity in charge of it gave interested companies one more month to submit binding offers for the remaining works at the site. Members of the House energy committee visited the facility to “see with our own eyes,” Disy MP Nikos Georgiou told journalists. The MPs were given a tour of the facility by officials from Defa (natural gas public company) and Etyfa (natural gas infrastructure company). A subsidiary of Defa, Etyfa are the owners and managers of the LNG terminal. The on-land facilities as well as the jetty were left half-finished after a Chinese-led consortium tore up the contract in July 2024. The government has since been seeking subcontractors to finish the pending works. “We don’t have the luxury for more delays,” Georgiou said. “Each delay has cost for the state, for the economy, and for the public.” The MP said he and his colleagues would “closely monitor” the project’s trajectory. “Assurances are no longer enough. We need specific dates, a specific cost and a specific responsibility.” He added: “Vasiliko must be completed and must operate. Cyprus needs energy security, and must have it with no more back-pedaling, no more missed opportunities.” Extension granted for interested companies Also on Tuesday, the head of Defa confirmed that they gave companies an extra month to submit binding offers for the works pending at Vasiliko. Giorgos Pistendis told Stockwatch that, after a request from the companies themselves, Defa has granted an extension until October 9 for the formal submission of offers. The previous deadline had been set for September 9. Pistendis said that “a number” of foreign companies have expressed an interest and have sent follow-up questions to Defa for clarifications. In late July, Etyfa published a competition for an Engineering, Procurement and Construction (EPC) contract for the remaining works at Vasiliko. Etyfa opted for a restricted procedure procurement method – a two-stage sourcing method where any interested supplier can ask to participate, but only pre-qualified candidates who pass selection criteria are invited to submit a full tender. The process is currently in the stage of informal expressions of interest. Once the interested parties submit binding offers (by October 9), Etyfa will assess the bids and then award the contract. According to the procurement documents, the awarding of a contract will be based on the best price-quality ratio – meaning Etyfa is not obliged to select the lowest financial offer. Media reports said the total value of the contract would come to €180 million, with a two-year timeline for completion of the works. The procurement documents were drafted with the assistance of Technip – consultants to the government. Initial contract was awarded in 2019 The LNG project comprises an offshore jetty for permanent berthing of a floating storage and regasification Unit (Fsru), associated marine and onshore pipelines, an onshore above-ground installation, an underground gas buffer storage system, and a pressure reduction and metering station connected to the nearby Vasiliko power station. The initial contract awarded in 2019, later cancelled, had a capital cost of approximately €315 million. Funding consisted of an EU grant of up to €101 million under the Connecting Europe Facility (CEF); a €43 million equity contribution from the Electricity Authority of Cyprus; and long-term debt financing through the European Investment Bank and the European Bank for Reconstruction and Development, supported by a sovereign guarantee from the Republic of Cyprus. Asked to comment on the current state of play, former energy minister George Papanastasiou said the hiring of a new contractor would likely alter the methodology – and also lead to an increase in cost. Papanastasiou told Stockwatch that the half-finished constructions have been exposed to wear and tear. In the meantime, he recalled, there is also the matter of the ongoing arbitration dispute before a London court between the government and the former Chinese-led contractor. “Getting your ducks in a row will take some time, perhaps we’ll get to 2030,” the former minister said. As for the Fsru vessel, dubbed Prometheas, it remains idle and moored at a port in Malaysia. Media reports said the government has received offers from companies to lease the vessel. One of the interested parties, according to unconfirmed reports, is Adnoc (Abu Dhabi National Oil Company), offering to lease the Fsru for around €50 million a year.