Negotiations Sought Amid LNG Terminal Dispute
In a recent development, the CPP-Metron Consortium Ltd (CMC), a Chinese-led construction firm, has urged for a high-level meeting with a Cypriot government-appointed “decision maker” to address the escalating crisis surrounding the Vasiliko liquefied natural gas (LNG) terminal. The consortium has proposed Dubai as a neutral venue for negotiations, aiming to reset the project’s course and ensure Cyprus can harness the benefits of the LNG facility.
CMC’s call for dialogue comes amidst allegations that the Natural Gas Infrastructure Company (Etyfa) is planning to sever its contract with the consortium in favor of local Cypriot suppliers. The Chinese consortium claims that Etyfa has been orchestrating this shift for months, bringing the situation to a critical juncture.
The consortium maintains its commitment to delivering the project and has presented a proposal to de-escalate tensions, resolve outstanding issues, and move forward with the LNG terminal construction. CMC emphasizes that the successful implementation of this proposal hinges on Cyprus designating an empowered decision maker to negotiate terms.
As tensions rise, Cypriot President Nikos Christodoulides is scheduled to meet with Chinese ambassador Liu Yantao to discuss the deadlock between CMC and Etyfa. Christodoulides asserts that the state will not succumb to pressure and remains committed to fulfilling its obligations. He expresses hope that through good faith and initiative, both parties can find a resolution.
Amidst this turmoil, CMC has accused Etyfa of breaching payment obligations and coercing the consortium into accepting demands by withholding payments. The consortium claims that Etyfa’s late payments have forced them to self-fund the work, deviating from the original agreement. Despite lifting their work suspension in March based on assurances from Etyfa, CMC remains concerned over payment approvals and timelines.
The dispute also extends to project specifications, with CMC alleging that Etyfa has significantly altered its requirements without compensating for these changes. The original contract awarded in 2019 included constructing a floating storage and re-gasification unit (FSRU) and a jetty. However, disagreements over the jetty’s construction have intensified, adding another layer to the ongoing conflict.
As the situation unfolds, Cyprus faces a pivotal decision: engage in negotiations with CMC or proceed with alternative plans to ensure the timely completion of the Vasiliko liquefied natural gas terminal.
