Deadline passes for interest in stalled Vasiliko gas terminal project

Vasiliko, Cyprus. The deadline for expressions of interest in taking over the stalled construction of a natural gas liquefaction terminal at Vasiliko passed on Friday. Energy Minister Michael Damianos said the number of interested companies and joint ventures would be known on Monday.

Completion estimated at €180 million

Speaking to the Cyprus News Agency, Damianos said Monday would clarify how many companies and joint ventures were interested in proceeding with offers.

He said the cost of completing the project was estimated at around €180 million and that he expected completion to take two years.

Construction stalled for more than two years

Efforts to build the terminal have been stalled for more than two years. China Petroleum Pipeline Engineering Co and Metron Energy Applications SA, which together formed the CPP-Metron Consortium (CMC), terminated their construction contract with the government in July 2024.

CMC accused public natural gas infrastructure company Etyfa of “bullying” and leaving the consortium to work “without proper or timely payments for years”.

A floating storage and regasification unit (FSRU), intended to be brought to Cyprus for use, remained moored in Malaysia without certification at the time. The vessel remains in Malaysia.

European Commission sought repayment of grants

Also in July 2024, the European Commission demanded that the Republic of Cyprus repay almost €69 million in grants paid for the terminal.

The money had been provided under the European Union’s “Cyprus Gas 2 EU” project, which was listed as an EU “project of common interest” and received €101 million in EU funding.

The energy ministry received a letter from the commission identifying “possible irregularities which occurred during the evaluation period of the tender” for the construction project.

According to the ministry, the letter “alleges two substantive violations”: the criteria used to award the tender to CMC in December 2019, and the signing of the bilateral agreement following approval of an additional €25 million in funding in June 2022.