LNG terminal

Our View: Finally something positive to say about LNG plant

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Our View: Finally something positive to say about LNG plant

The government and the CPP-Metron Consortium Ltd (CMC), contracted for the construction and operation of the Vasiliko LNG terminal, have mended their relationship after previously heading towards a costly separation. Energy Minister George Papanastasiou had considered terminating the contract with CMC due to their work stoppage at Vasiliko since the end of January and a €200 million claim against Cyprus at a London arbitration court for higher costs and alleged failure by the project manager, Etyfa, to fulfill its obligations. A meeting between CMC representatives and Papanastasiou resolved differences, and President Nikos Christodoulides subsequently inspected the project site. CMC expressed gratitude for the meeting, highlighting prior unaddressed meeting requests with Etyfa. The energy ministry will now directly manage the project, sidelining Etyfa due to its inadequate response and unclear project instructions, and will establish a body for project monitoring and a group for dispute resolution. The financial disputes remain unresolved but will be addressed by Defa and Etyfa, who had signed the contracts with CMC. The project is set to proceed, with CMC bringing in 120 workers from China with the necessary expertise, aiming for completion by the end of the year.

MPs hear LNG grant could be lost

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MPs hear LNG grant could be lost

Cyprus risks losing part or all of an EU grant for the liquefied natural gas (LNG) terminal in Vasiliko due to not meeting certain requirements. The LNG terminal project is 80% complete, with the floating, storage, and regasification unit at 97% and the land-based infrastructures at 50%. Cyprus has received two extensions from the European Commission for the project, with the latest extension expiring at the end of 2024. To receive the remaining €28.9 million of the €101 million grant, Cyprus must have €253 million in recognized expenditures for the terminal by the end of 2023 and complete the project with the necessary certification by the end of 2024. Failure to meet these conditions could result in losing 20% of the remaining EU grant or more.

Christodoulides visits LNG terminal as work restarts

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Christodoulides visits LNG terminal as work restarts

– President Nikos Christodoulides visited the liquefied natural gas (LNG) terminal to mark the restart of construction work.
– The government aims to reduce electricity prices, with the LNG terminal’s operation playing a key role in this effort.
– Other actions to reduce electricity costs include renewable energy sources and a proposed electrical interconnector connecting Cyprus, Greece, and Israel.
– Construction of the terminal is set to recommence, confirmed by Energy Minister Papanastasiou after a meeting with the Chinese-led CPP-Metron Consortium Ltd (CMC).
– The ministry has not entered any new contractual obligations as the meeting was between the ministry and CMC, without the involvement of the Natural Gas Infrastructure Company (Etyfa) and the Natural Gas Public Company (Defa).
– An action group will be created to monitor the project from the ministry’s perspective.
– The floating storage and re-gasification unit, part of the terminal’s contract signed in 2019, is almost complete and will be discussed further via a video call.
– The goal is to reduce the cost of electricity production in Cyprus by switching to natural gas, which is more environmentally friendly and expected to reduce the cost of pollutants by about 40%.

LNG terminal construction in Vasiliko to resume (updated)

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LNG terminal construction in Vasiliko to resume (updated)

The CPP-Metron Consortium Ltd (CMC) is scheduled to resume construction of an LNG terminal in Vasiliko over the upcoming weekend. This decision was made after a meeting between CPP representatives from China and Energy Minister George Papanastasiou. The meeting, described as ‘productive’, focused on the relationship between the two sides rather than the differences regarding the project’s execution. CMC plans to bring personnel from China for the project, and the Cypriot side has agreed to facilitate this by issuing visas. The General Manager of CPP expressed gratitude towards the minister for his positive approach towards completing the project. Construction is set to restart on the morning of 16 March 2024. The government had previously considered terminating the deal due to a dispute that led to the halting of construction in late January and a claim for €200 million from Cyprus by the consortium in a London court.

Government , ‘has no plan B’ over Vasiliko LNG terminal

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Government , ‘has no plan B’ over Vasiliko LNG terminal

The Vasiliko liquefied natural gas (LNG) terminal project in Cyprus is currently stalled, with no alternative plan (“plan B”) in place, as stated by Energy Minister George Papanastasiou. The project is facing delays due to arbitration proceedings between the Republic of Cyprus and the Chinese-led consortium responsible for building the LNG plant. Despite reservations about the consortium, the government aims to complete the project with the current contractor as the fastest solution, requiring the project to be delivered by July 2024. This deadline comes after two previous extensions, with the initial completion date set for September 2022. Papanastasiou remains optimistic about the project’s completion and is in discussions with the Chinese Ambassador Liu Yantao. Concerns about potential violations and the need for possible criminal investigations have been raised, with some suggesting the matter be referred to the Anti-Corruption Authority.

Chinese-led group to visit Vasiliko over stalled LNG plant

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Chinese-led group to visit Vasiliko over stalled LNG plant

High-level officials from a Chinese-led consortium responsible for constructing the liquefied natural gas (LNG) terminal at Vasiliko in Cyprus are expected to visit within the week. Energy Minister George Papanastasiou announced that the government will request a timetable for consultations between the parties and mentioned that if a positive outcome is not reached, a joint decision to suspend cooperation will be made. He highlighted that work on the terminal has stopped as the government wants to know the company’s plans and when the floating unit, currently in Shanghai, will be certified. Papanastasiou emphasized that building the LNG terminal at Vasiliko is the fastest way to introduce natural gas for electricity generation in Cyprus, aiming to reduce emissions and lower electricity costs. Additionally, Cyprus plans to participate in the Great Sea Interconnector project with an investment of up to €100 million, with consultations ongoing with investment funds and the Independent Power Transmission Operator (IPTO). A meeting with the largest investment fund interested in the project, from the United Arab Emirates, IPTO, and the energy ministry, is scheduled to take place to shape the course of this project.

Government gas body , ‘mismanaged’

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Government gas body , ‘mismanaged’

Lawmakers criticized the Natural Gas Public Company (Defa) for mismanagement and lack of transparency as it presented its 2024 budget to parliament. This budget, amounting to €38 million in projected capital and operating expenditures, is the first since Defa transitioned from a private to a public law entity. Defa, the sole entity authorized to import and distribute natural gas in Cyprus, is seeking to create 36 new jobs this year. The 2024 state funding for Defa will be €12 million, a decrease from €18 million the previous year. The budget includes a €20.5 million allocation for investments in subsidiaries, specifically for the equity of the Natural Gas Infrastructure Company (Etyfa), which is tasked with developing the liquefied natural gas (LNG) terminal in Vasiliko. This project has experienced delays and disagreements with the contractor. Infrastructure related to the LNG terminal is expected to be completed within 2024. Once operational, Defa’s budget is expected to significantly increase, with projected annual revenues from LNG sales at €500 million. However, the LNG import project has faced challenges, including a halt in construction and disputes with the Chinese-led consortium responsible for the project. The completion date for the project has been postponed multiple times, with the current expectation set for July 2024. Concerns were also raised about Defa’s internal organization, including the absence of a job description and organizational chart. Defa officials have been summoned to parliament to address these issues, among others.

Akel demands cheaper electricity

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Akel demands cheaper electricity

The opposition party Akel in Cyprus, led by Stefanos Stefanou, has urged the government to reduce electricity costs for households and businesses and has demanded an investigation into the liquefied natural gas (LNG) terminal project at Vasiliko. Stefanou emphasized the need for Cyprus to transition to natural gas for electricity generation to avoid the high costs associated with burning heavy fuel oil, highlighting that Cyprus paid about €350 million in greenhouse gas emissions allowances last year. Akel has proposed several measures to alleviate high electricity prices, including reducing VAT on electricity from 19% to 9%, taxing windfall profits of banks and energy companies, promoting competitive tenders for renewables, and extending electricity subsidies.

Eni, Total confirm , ‘excellent’ natgas well at Cronos-2

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Eni, Total confirm , ‘excellent’ natgas well at Cronos-2

Italy’s Eni and French TotalEnergies have confirmed the extension and excellent well deliverability at their joint natural gas field within the Cronos discovery in the Cyprus offshore exclusive economic zone. The Cronos-2 well was drilled to appraise the nearby Cronos discovery in Block 6, and it has high production capability estimated at over 150 million standard cubic feet per day of gas. Eni Cyprus Limited is the operator of Block 6 with a 50% participation, with partner TotalEnergies EP Cyprus B.V. holding the remaining 50%. The government’s main goal is to enable access to cheaper energy for Cypriot citizens. Cyprus is behind schedule in converting its infrastructure to import natural gas, resulting in significant carbon emission fines. Eni aims to tap into and export natural gas from the Cronos gasfields through a subsea pipeline to its Zohr field in Egyptian waters.