CMC call for meeting on ‘neutral territory’ in Vasiliko spat

Chinese-led construction firm CPP-Metron Consortium Ltd (CMC) called for a meeting with a “decision maker” appointed by the Cypriot government in a “neutral territory” as the crisis deepens over the under-construction liquefied natural gas (LNG) terminal at Vasiliko.

It said, “the Chinese consortium has made it clear that it is willing to meet such a decision maker in a neutral territory, such as Dubai, to negotiate the necessary reset which would allow Cyprus to realise the benefits of this project.

“The choice between a successful or failed project is entirely in Cyprus’ hands,” it added.

It said, “in recent days, it has become clear” that Natural Gas Infrastructure Company (Etyfa) has a “plan to terminate its contract with the Chinese consortium in favour of contracting with local Cypriot suppliers to complete the LNG import terminal”.

For this reason, it said, “it has spent the last few months, possibly longer, orchestrating a situation to allow that to happen”, and that the situation has now “reached a crisis point”.

“The Chinese consortium has remained, throughout, willing to deliver this project and even now has offered the Cypriot government a way to step back from the brink and save this project so that natural gas can be brought to Cyprus and generate electricity at the earliest possible opportunity and at the most competitive budget,” it said.

It added that it has “tabled a proposal which offered Cyprus a comprehensive solution to de-escalate the situation, unblock the stalemate, and resolve all outstanding issues.

“If Cyprus truly wants to avoid the increasingly real catastrophe of losing its chance of bringing natural gas to the island to generate electricity in the foreseeable future, Cyprus needs to appoint a decision maker with full authority to discuss and agree the route to implementing that proposal,” it said.

CMC’s latest statement comes as Cypriot President Nikos Christodoulides is set to meet Chinese ambassador Liu Yantao to discuss the impasse between CMC and Etyfa.

“The state will not be blackmailed, the state is faithful to its obligations, and we always respond, and we are here in this matter as well to deal with it,” Christodoulides said.

He went on to say that regarding the Vasiliko project, “we have a plan which needs to be implemented.

“With absolute good faith and will, we will manage the problems which have come up and I hope that with good will and initiative on the other side, solutions will be found,” he added.

Asked whether the government has a ‘plan B’, he said, “of course there is a ‘plan B’. We are obliged to think about a ‘plan B’, but I do not want it to get to that point.”

CMC had said on Saturday that Etyfa “has persistently breached its payment obligations under its contract … for the Vasiliko LNG facility.”

It said, “Etyfa has used such non-payment as a ‘weapon’ to coerce CMC into accepting various Etyfa demands. Etyfa was late by a year in making certain advance payments and has persistently failed to make milestone payments.”

“As a result, CMC has been forced into the unsustainable position of funding the work it has performed. This was never the agreed deal,” it said.

It added that their suspension of work in January was an “absolute last resort” which they lifted in March “on assurances that Etyfa would clear debts [owed] to CMC and going forward would comply with the contractual procedures and timetable for approving payments.”

Earlier, it had said Etyfa had made “huge changes to what it asked CMC to build” and that CMC “has worked hard to meet Etyfa’s demands” and therefore “wonders why Etyfa is still refusing to pay for all the changes”.

Outlining the original plans, CMC said Etyfa had awarded them with the contract to build the facility in 2019, and that the contract included the construction of a floating storage and re-gasification unit (FSRU) and a jetty connecting it to the shore.

“We have been working hard for years … and apart from Etyfa’s inexplicable refusal to take delivery of the completed FSRU which is ready in Shanghai, another major dispute between the parties now concerns the jetty itself.”