Reconciliation and Progress at Vasiliko LNG Terminal
In a significant turnaround, the government of Cyprus and the CPP-Metron Consortium Ltd (CMC) have successfully mended their strained relations concerning the Vasiliko LNG terminal project. This reconciliation comes as a relief after tensions had escalated to the brink of a costly separation.
Energy Minister George Papanastasiou had previously hinted at the possibility of terminating the contract with CMC and seeking a new contractor. The consortium had ceased operations at the end of January and pursued legal action, claiming €200 million in a London arbitration court due to increased costs and alleged non-fulfillment of contractual duties by Etyfa, the project manager.
The impasse was resolved last Friday when Minister Papanastasiou and CMC representatives reached common ground. In a gesture that underscored the project’s revival, President Nikos Christodoulides inspected the progress at Vasiliko the following day. CMC expressed gratitude for the minister’s willingness to engage in dialogue, especially after their requests for meetings with Etyfa had been consistently dismissed.
Etyfa’s role in this debacle has raised questions, particularly regarding its handling of the contractor’s concerns and its capacity to manage such a project. With Etyfa now sidelined, the energy ministry has taken a direct approach to project management, establishing a body to monitor progress and a group to preemptively address disputes.
Although financial disagreements remain unresolved, Papanastasiou has delegated this matter to Defa and Etyfa, who hold the original contracts with CMC. Nevertheless, the project is set to move forward, with CMC bringing in 120 specialized workers from China to ensure timely completion.
This series of positive developments has led to an optimistic forecast by Papanastasiou, who anticipates that the terminal could be operational by year’s end. This progress is not just a win for the involved parties but also for Cyprus’s energy sector and its stakeholders.
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