China’s CMC withdraws from Cypriot LNG import project

A Chinese consortium, CPP-Metron Consortium (CMC), has withdrawn from constructing the 2 Mt/year LNG import terminal in Vasilikos, Cyprus, after accusing the government of failing to pay for work completed in 2024. The project involved constructing a pile-supported jetty and access trestle to facilitate the berthing, loading, and unloading of a Floating Storage and Regasification Unit (FSRU). Additionally, it included associated onshore works such as pipelines, meters, and a buffer zone. The project was financed by the European Investment Bank (EIB), with a €150m loan, the European Union (EU) with a €101m grant the Connecting Europe Facility, the European Bank for Reconstruction and Development (EBRD), with a €80m loan, and the Electric Authority of Cyprus (EAC), the country’s state-owned power utility, with a €43m equity contribution.

The Natural Gas Infrastructure Company of Cyprus (ETYFA), a joint venture between CYGAS (Natural Gas Public Company, 70%) and EAC (30%), signed an EPCOM (Engineer, Procure, Construct, Operate and Maintain) contract with the CPP-Metrom Consortium (CMC) comprising China Petroleum Pipeline Engineering (CPP), Metron Energy Applications, Hudong-Zhonghua Shipbuilding and Whilhelmsen Ship Management in December 2019 with a 24-month deadline for completion. Since the signing of the contract, the CPP has submitted four delivery timetables: September 2022, July 2023, October 2023 and July 2024. Construction started in July 2020. The Cypriot government is now expected to bring on new subcontractors to complete work on the onshore terminal and jetty in as quickly as 10 months.

Regasified LNG was expected to supply EAC's 868 MW Vasilikos power plant, which accounts for 37% of Cyprus’s installed capacity. Cyprus remains unique within the EU for its reliance on oil for power production, which accounted for 83% of the country’s generation mix in 2022, compared to 2% on average in the EU.