The contract between the Natural Gas Infrastructure Company (ETYFA) and the CPP-METRON Consortium Ltd (CMC Ltd) for the construction of the Vasilikos liquefied natural gas (LNG) terminal is coming to an end, Energy Minister George Papanastasiou announced on Tuesday in Parliament.

“Both parties seem to agree on terminating the contract and delivering the floating unit in its current condition,” said Papanastasiou during a briefing to the Parliamentary Energy Committee. He noted that intense daily discussions were ongoing to finalise the agreement.

Regarding the floating unit, the Energy Minister explained that the ship was ready, as an LNG carrier and could sail to Cyprus under certain conditions. However, as he said, the second certification for gas regasification cannot be granted until the ship enters an import terminal like the one under construction at Vasilikos, where its operational standards will be verified.

He added that ETYFA aimed to sail the ship as soon as possible, likely reaching a conclusion within the next few days, and simultaneously terminate the contract. He also mentioned that ETYFA was planning to complete the terminal through alternative means, while the Chinese consortium sought to avoid liabilities.

In response to a question, Papanastasiou said that once the contract was terminated, efforts would immediately focus on completing the terminal by different means.

"The alternative completion of the terminal will follow the surviving clauses from the termination, indicating how the project can be finished. If these clauses are insufficient, a new contractor will be found to complete the remaining parts," he explained.

Later, Papanastasiou described the negotiations with CPP as tough, particularly regarding the departure of the floating unit.

"This is a tough negotiation linking the departure of the floating unit with solutions for the other two parts of the terminal," he said on the sidelines of the presentation of the Electricity Authority of Cyprus's (EAC) Annual Report.

The Vasilikos terminal comprises three parts: the floating LNG unit, the jetty, and the onshore segment. "We believe the latter two are easier to complete, as they are 60% constructed, and we can finish the remaining 40% with our resources," Papanastasiou said.

The floating unit remains the primary focus of the negotiations. " ETYFA is concentrated on receiving the floating unit since it constitutes 75% of the project," the Minister noted.

He added that both sides recognised the difficulty of continuing the contract.

"We see a terminal that is incomplete despite multiple extensions, indicating a probable inability of the other side to finish it. We seek a resolution to these delays affecting the LNG regasification terminal's operation," Papanastasiou noted.

He suggested that the consortium might also recognise its technical or financial shortcomings, aligning both parties towards an out-of-contract solution.