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Monday, July 22, 2024

CMC comes back and says ETYFA is not paying for changes it requested on the LNG jetty

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    Ε&pi αεηεηεδ εληρεαουησε ηνοβταLNG

    What CMC says in its announcement

    ETYFA made huge changes to what it asked of the CMCto build at the new liquefied natural gas (LNG) jetty in Vasilikos and CMC has worked hard to satisfy ETYFA's demands, says in a new announcement the construction company of the LNG terminal in Vasilikos CPP-METRON CONSORTIUM LTD (CMC) and wonders when because the Natural Gas Infrastructure Company (ETYFA) still refuses to pay for all the changes, at the same time speaking of an unsustainable situation for itself.

    In its announcement the CMCstates that ETYFA awarded CMC the construction of the Vasilikos LNG facility in December 2019 and that this award includes the jetty connecting the FSRU vessel to onshore facilities.

    The company states that it has been working hard for years and that despite the COVID-19 pandemic, and despite the non-payment by ETYFA, it has achieved a lot and adds that “apart from ETYFA's inexplicable refusal to take delivery of the completed FSRU vessel which is ready in Shanghai, another major dispute between the parties concerns the pier itself.”

    According to the construction companyalthough the parties' dispute over the jetty has existed for several years, CMC has not made any public statements on this matter and has focused as much as possible on finding practical solutions for the good of the project. “However, ETYFA's continued disengagement from efforts to resolve this issue makes CMC's silence impossible,” he adds.

    CMC argues that ETYFA substantially changed what it asked CMC to build. “Simply put, CMC signed a contract to design, build and operate one type of project (importing LNG and converting it to natural gas), but ETYFA later insisted that CMC build something fundamentally different (a facility capable of exporting LNG)” says the manufacturing company, stating that “this is a radical departure from the parties' original agreement for CMC to construct an LNG receiving and regasification facility”.

    It adds that an export facility LNGrelies heavily on state-of-the-art “cryogenic” technology that involves cooling natural gas to extremely low temperatures, turning it into a liquid state, known as LNG, and that this process is essential for the efficient and safe export of natural gas over vast distances. “But this technology to export LNG brings with it a huge variety of new technical and cost issues and this request by ETIFA has had a colossal impact on CMC's works at the jetty,” he adds.

    CMC further argues that ETYFA required not only the “capability” to add cryogenic capability in the future, but basically cryogenic capability from day one in terms of pier design and construction, which had a huge impact on CMC's cost of which CMC is entitled to indemnify.

    He goes on to say that although he has worked hard to cover this very different possibility since day one “imposed” by ETYFA, many other elements will need to be built which will take many years to make LNG export from his facilities feasible. Vasilikou. In fact, the construction company claims that LNG export is far in the future for Cyprus (if it ever happens), and that despite this, ETYFA insists that the design and construction of the Vasilikos pier must be ready for it.

    “For Cyprus to start such a monumental LNG export project would be a major financial undertaking and would have costs that could reach several billion euros. The timeline for such a project would likely extend well beyond just six years, underscoring the enormity of the effort,” CMC adds.

    It is further stated that despite the difficulties imposed on CMC by the changes that ETYFA imagined as easy, CMC did what ETYFA asked and that the issue now is that ETYFA must pay CMC for the huge amount of extra labor and materials that are being used to realize ETYFA's new “vision” for the project, from a natural gas import project to a much more complex cryogenic export project. “ETYFA has so far refused to deal with this problem and has taken the opposite approach,” he argues.

    CMC finally argues that ETYFA is the one that created this situation with a “dream” to export LNG for the achievement of which (if it is ever achieved) may take many more years and many more billions of euros which is not CMC's concern. “CMC has done its best for ETYFA and the Republic of Cyprus, but the situation for CMC has become serious and unsustainable on CMC's part,” the statement concluded.

    Source: cyprustimes.com

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