**NICOSIA –** Cypriot taxpayers are shouldering an eye-watering annual burden of approximately €350 million due to the protracted delays and eventual abandonment of a crucial liquefied natural gas (LNG) import terminal project. The colossal sum is primarily attributed to the ongoing reliance on diesel for electricity generation, necessitating the purchase of costly greenhouse gas emission allowances. This financial drain, revealed during recent parliamentary scrutiny, underscores the significant ramifications of the project's faltering progress.
The ambitious LNG terminal, earmarked for Vasiliko, has been mired in difficulties since a Chinese-led consortium abruptly withdrew from proceedings in July of this year. This precipitous departure has left the project in limbo, with critical infrastructure, including a vital jetty, only half-constructed. Consequently, the state-owned natural gas company, Defa, has been compelled to initiate a new tendering process for subcontractors, signalling a renewed, albeit belated, effort to salvage the remaining works.
Adding another layer of complexity to the situation is the status of the Prometheas floating storage and regasification unit (FSRU). Giorgos Ashikalis, the head of Defa, confirmed that the vessel is now technically operational, having recently undergone the installation of essential components, including missing valves and a nitrogen unit, at a cost just shy of €1 million. However, the Prometheas remains geographically marooned. Its inability to berth in Cyprus stems directly from the unfinished state of the Vasiliko jetty, rendering its immediate deployment impossible.
In light of these considerable obstacles, the government is reportedly exploring a range of strategic options for the Prometheas. These possibilities reportedly include dispatching the FSRU to another jurisdiction for certification, a process that could facilitate its eventual use, or exploring avenues for leasing the vessel. Yet, any potential leasing arrangement is contingent upon securing the approval of the European Commission, a key co-financier of the project, highlighting the intricate international dependencies involved.
The financial implications of this stalled venture are stark. The quoted figure of €350 million annually represents the cost of greenhouse gas emission allowances incurred because electricity generation continues to rely on fossil fuels like diesel, rather than the cleaner alternative of LNG. This ongoing reliance not only incurs substantial financial penalties but also impedes Cyprus's progress towards its climate objectives and the broader European energy transition.
Members of Parliament, during recent questioning of state officials, expressed considerable concern over the protracted delays and the mounting financial penalties. The situation with the Prometheas vessel further exacerbates the predicament, with its technical readiness contrasting sharply with its current inoperability due to infrastructure deficits. The government’s deliberations on the FSRU’s future underscore the uncertainty surrounding the project and the substantial investment that now faces an indeterminate outcome. The path forward for both the LNG terminal and the Prometheas appears fraught with challenges, demanding careful navigation and, crucially, the securing of all necessary regulatory and financial approvals.