The Chinese state-owned company CPP intervened yesterday with the statements of its representative in the KYP , through which he assures that at the end of this month he will … start the works in Vasiliko and July of 2023, or even earlier, he will be able to deliver the project.
This is the first time that there is an official acknowledgment that the much-discussed projects for the new pier in Vasiliko and the other infrastructure for receiving liquefied natural gas carriers and for distributing the gaseous fuel to the EAC stations or private power generators have not even started. Until recently, the previous administration of DEFA (recently replaced by President Anastasiadis) stated monotonously that the projects are proceeding normally, without clarifying that almost nothing substantial has progressed on land or at sea, from its contractual obligations. consortium that won the international tender.
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The statements of the CPP representative show that from September 2020, which is considered the month of the start of the project, until today, what has been done is 90% of the planning, some materials and equipment supply agreements and the first modifications to the ETYFA Promitheas ship , which will be converted into a floating liquefied natural gas storage and regasification plant at a Cosco shipyard (the contract mentioned another shipyard as a subcontractor) in Shanghai.
What is pending
Despite the assurances of the consortium, very serious fronts remain open, from the management of which will depend in essence the start of the technical works in Vassiliko, but also the pace at which the constructions will proceed.
What is pending are, in a nutshell, the following:
– The opinion of the Attorney General (requested by the President on Thursday) as to the legality of a possible -significant- amendment of the contract with the CPP, by the state.
– The completion of the negotiation with the CPP and the taking of a political decision by the government, for the final content of the changes in the contract. What is “burning” is whether the government will agree to pay about 25 million extra to get the project going smoothly, as the company cites very high material purchasing costs due to the pandemic. It also “burns” whether the state will use a clause in the contract, which allows it to claim compensation from the consortium, for the 8-9 months of delay so far. The amount of the total compensation is estimated, from the Cypriot side, close to 50 million euros, something that the company disputes.
– The preparation of a detailed explanatory memorandum – application by the contracting authority (ETYFA), for the reasons that require the modification of the contract. The note will be submitted to the Central Committee for Changes and Requirements (KEAA), whose consent is required.
– The decision of the KEAA on the government request.
Normally, the above pending cases will take time, more than the other days of February, at the end of which CPP places the start of the works. However, a competent source told Phileleftheros that there is an informal agreement between the two parties, which stipulates that if they agree on the final text of the amendments to the contract, the consortium will start work immediately, without waiting for the final decision of KEAA.
CPP assurances for delivery by July 2023
From yesterday's statements of the EPC Executive Manager of China Petroleum Pipeline (CPP), George Christou, to KYPE, the following stand out:
– The basic design has been completed at a rate of over 90%.
– The required permits for the first works have been secured and the construction site offices have been installed on site. The first works in Cyprus will have started by the end of February.
– There is a clear will of all those involved for the completion of the project in Vasiliko as soon as possible and solutions were given to issues caused by the pandemic.
– The project could not start when the contracts were signed (December 2019), as the completion of the financing from the European Banks was pending, while the order for start (Notice to Proceed) was given in May 2020, as he said.
– The Commencement Date was set for September 28, 2020. Mr. Christou added that “this period until today, has been characterized as one of the most difficult ever in the global market (…) . “Many important projects around the world have been canceled and many have had to be redefined in terms of their viability, cost, while the delivery time of raw materials and equipment has skyrocketed, without anyone being able to commit or guarantee final delivery.”
– “CPP, with its experience and size, has managed to provide the raw materials and equipment required for the project, keeping prices and delivery times at manageable levels.”
– “The revised schedule, which provides for the delivery of the project in July 2023, will be adhered to, with an effort even to improve it, considering that there will be no further unforeseen situations.”
– In relation to the ship “ETYFA Prometheus”, which is the largest and most complex part of the project, the works at the COSCO shipyard in Shanghai are in full swing. “Currently the two most vital units, the Regas unit and the Power Module, are under construction.”