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Tag: LNG terminal

  • Finance Minister Keravnos Raises Concerns Over Great Sea Interconnector Funding

    Finance Minister Keravnos Raises Concerns Over Great Sea Interconnector Funding

    great sea — Finance Minister Makis Keravnos has voiced significant concerns regarding the funding of the Great Sea Interconnector (GSI) project, citing potential financial risks associated with its implementation. In remarks made following a meeting of the Council of Ministers on Monday, where the 2026 state budget was under consideration, Keravnos highlighted findings from various studies suggesting that the GSI may not be financially sustainable.

    Keravnos stated, “I still think this issue is under discussion. If we pay the money, there is a risk. As I have said, studies suggest that the project is not viable.” His comments reflect a consistent apprehension regarding the project’s feasibility, a sentiment he has expressed on multiple occasions.

    The GSI aims to connect the energy grids of Cyprus, Greece, and Israel, representing a significant step towards regional energy integration. However, the project has faced various challenges, leading to the Cypriot government withholding €25 million requested by Greece’s independent transmission system operator, Admie, to assist with its funding.

    During the budget preparations, Keravnos mentioned that both internal and external risks had been evaluated, with the GSI identified as a notable concern. He emphasised the uncertainty surrounding the final cost of the project, which adds another layer of complexity to funding decisions.

    In a related matter, the Minister addressed the European Commission’s demand for the return of €67 million related to the Vasiliko liquefied natural gas (LNG) terminal, which was never completed. Keravnos assured that the government is actively managing this issue, hinting at potential offsets with future funds. “We are not giving up, we are fighting,” he asserted, indicating a commitment to navigating the financial challenges ahead.

    When pressed by journalists about the possibility of negotiating the demanded amount, Keravnos firmly stated that the figure was not negotiable under any circumstances, reaffirming the government’s position on the matter.

  • Government Faces Pressure Over Vasiliko LNG Terminal Safety Concerns

    Government Faces Pressure Over Vasiliko LNG Terminal Safety Concerns

    vasiliko lng — The government is engaged in “damage limitation” following reports of “serious safety issues” regarding the construction of a liquefied natural gas terminal at Vasiliko, Energy Minister George Papanastasiou said on Saturday.

    His comments were prompted by a report from television channel Omega, which highlighted significant “design and materials issues” affecting the project. A source cited by Omega noted, “There are very serious technical issues, which make it impossible to continue the work at this time. That is why the work on the pier has been at a standstill for months and no timetable has been given by the authorities for the completion of the work.”

    In light of these revelations, the project coordinator is preparing a comprehensive report to be presented to the natural gas infrastructure company Etyfa or directly to Papanastasiou early next month. This report is critical as Papanastasiou will need to make final decisions on how to address the myriad issues plaguing the terminal’s construction. Any corrective measures could involve disbursing millions of euros, raising concerns about the financial burden on taxpayers.

    Within the energy ministry, there is “intense concern” as officials grapple with the legacy of past problems, emphasising the urgency to proceed with the terminal’s completion. However, should the report indicate that continuing as planned is unfeasible, Papanastasiou may need to take decisive action and identify those accountable for the existing issues.

    Papanastasiou confirmed on Saturday that the report is nearing completion and stated that responsibility for the problems encountered at Vasiliko will be assigned. He had previously announced that the government aimed for the LNG terminal’s construction to be finished by the end of this year. Yet, the latest developments suggest yet another setback in a series of challenges that have plagued this project over the years.

    The construction hit a major roadblock last year when the CPP-Metron Consortium (CMC) terminated its contract with the government. CMC accused Etyfa of “bullying” and claimed it had been left to work without proper or timely payments for years. They expressed frustration over the lack of relevant experience among Etyfa and its advisers, stating, “The position has become untenable. Contrary to the promises that were made by the [energy] minister in March, CMC has still not received any payment whatsoever for its work in 2024.”

    This dispute has resulted in significant delays, with the floating storage regasification unit (FSRU) at the centre of contention. CMC maintains that the vessel, initially ready for delivery in Shanghai, is now in Malaysia undergoing necessary modifications to meet project requirements.

    Further complicating matters, the European Commission demanded last July that Cyprus repay nearly €69 million in grants allocated for the terminal. The commission’s letter cited “possible irregularities” during the tender evaluation period and alleged two significant violations: the criteria for awarding the tender to CMC in December 2019 and the signing of a bilateral agreement for an additional €25 million in funding in June 2022.

    Additionally, the European Public Prosecutor’s Office (EPPO) has launched an investigation into potential procurement fraud, misappropriation of EU funds, and corruption linked to the Vasiliko LNG terminal. Cyprus signed the contract for this critical LNG project in December 2019, with an expected completion timeline of 22 months.