The government has renewed efforts to find a legislative route that would allow it to bypass a time-consuming tender process for completing the stalled natural gas terminal at Vasilikos, with recent talks focused on UAE state energy giant ADNOC.
Officials believe legislation fully harmonised with EU law permits avoiding an open tender under specific conditions, provided the contractor is a state-owned company, according to sources familiar with the matter.
The push, which began under former energy minister Georgios Papanastasiou and continues under his successor Michalis Damianos with direct Presidential Palace involvement, initially focused on finding an EU member state company. The government later concluded a third-country state firm could also qualify.
Recent exploratory contacts with both an EU state company and a third-country firm found more promising ground with the latter—the UAE—according to available information. Contacts with ADNOC or one of its subsidiaries were renewed yesterday during Damianos’s visit to the country.
ADNOC, which days ago signed a $3bn, 10-year LNG supply deal with India’s Hindustan Petroleum, has conveyed keen interest in Cyprus’s open energy fronts, including the terminal and blocks in Cyprus’s exclusive economic zone, sources said.
However, prospects for a terminal agreement remain limited for now. ADNOC has indicated it wants a role as operator or co-operator—currently held by state company ETYFA—rather than simply serving as contractor. This demand complicates matters legally and reduces the chances of a deal, according to the sources.
Nothing can be considered final at this stage. What is certain is that if the Republic ultimately cannot avoid launching a new tender for completing the Vasilikos works, natural gas imports will be pushed far into the future.
ETYFA is not yet ready to formally and bindingly state what French firm Technip found and recommends, despite receiving the Gap Analysis on 19 December. Once ETYFA determines what the Technip study says and briefs the ministry and Presidential Palace, the next time-consuming process—preparing terms for the next tender—may begin.
But for that to happen, ETYFA would need to accept legal liability for errors and omissions by Chinese contractor CPP in purchasing and installing equipment for work completed so far.
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