Cyprus risks losing a €101 million EU grant for its LNG terminal project if it does not meet certain conditions. The project must have €253 million in recognized expenditures by the end of 2023 and be fully completed, with all certifications, by the end of 2024, to avoid forfeiting the funds. This setback would impact Cyprus’s energy diversification efforts and its ability to reduce reliance on imported oil, highlighting the importance of completing the LNG terminal in Vasiliko.
Why might Cyprus lose the EU grant for the LNG terminal project?
Cyprus risks losing a €101 million EU grant for its LNG terminal project if it does not meet certain conditions. The project must have €253 million in recognized expenditures by the end of 2023 and be fully completed, with all certifications, by the end of 2024, to avoid forfeiting the funds.
Cyprus is facing a critical challenge as it may forfeit a significant portion, if not the entire, EU grant dedicated to the development of the liquefied natural gas (LNG) terminal in Vasiliko. During a recent parliamentary session, the Natural Gas Public Company (Defa) alerted lawmakers to the possibility of this financial setback. The grant, amounting to €101 million, stems from the Connecting Europe Facility, a key EU funding instrument for promoting growth, jobs and competitiveness through targeted infrastructure investment.
The general manager of Defa, Marios Menelaou, reported to members of parliament that the construction of the LNG terminal is 80% complete. The floating, storage, and regasification unit (Fsru) has reached a completion level of 97%, while the land-based infrastructures are only halfway done. Nikolas Valanides, Defa’s chief financial officer, noted that the European Commission had granted two extensions for the project, with the current extension expiring at the end of 2024.
Critical Timelines and Project Milestones
The stakes are high for the LNG terminal project to adhere to its new timelines. Should progress stagnate at the 80% mark by the year’s end, Cyprus stands to lose 20% of the remaining EU grant. To receive the final €28.9 million, Cyprus must fulfill two key conditions: recognized expenditures for the terminal must reach €253 million by the end of 2023, and the project must be completed, with all relevant certifications, by the end of 2024.
The chair of the House energy committee, Kyriacos Hadjiyiannis, expressed doubts about the project’s completion within the deadline. Without a responsible dialogue with the European Commission regarding the extension, the possibility of grant reduction, or even a total withdrawal, looms. Defa’s documentation revealed that €10 million had been billed for the owner’s engineer, a consultancy role to oversee contractor performance, emphasizing the critical monitoring of the project’s advancement.
The Significance of the LNG Terminal
The LNG terminal project is not just a significant infrastructure venture; it is a vital component in Cyprus’s strategy to diversify its energy sources and reduce reliance on imported oil. The terminal is expected to facilitate the supply of cleaner energy and contribute to the island’s energy security. With the EU’s push towards renewable energy sources and reduced carbon emissions, the successful completion of the LNG terminal is also aligned with broader environmental goals.
As the clock ticks towards the 2024 deadline, Cyprus must navigate the challenges of completing the terminal. The successful realization of this project carries implications for the nation’s energy landscape and its standing within the European community. With strategic importance and financial investments at stake, the terminal’s completion will be a testament to Cyprus’s commitment to energy innovation and sustainability.
Why is the completion of the LNG terminal project in Vasiliko important for Cyprus?
The completion of the LNG terminal project in Vasiliko is crucial for Cyprus as it is a key component of the country’s energy diversification efforts. It will help reduce Cyprus’s reliance on imported oil and provide a cleaner energy source, contributing to the nation’s energy security and aligning with broader environmental goals.
What are the conditions that Cyprus must meet to avoid losing the EU grant for the LNG terminal project?
Cyprus must have €253 million in recognized expenditures for the LNG terminal project by the end of 2023 and ensure that the project is fully completed, with all certifications, by the end of 2024 in order to avoid forfeiting the €101 million EU grant.
What percentage of the EU grant for the LNG terminal project will Cyprus lose if progress stagnates at the current completion level by the year’s end?
If progress stagnates at the current completion level by the year’s end, Cyprus stands to lose 20% of the remaining EU grant for the LNG terminal project. To receive the final €28.9 million, the project must meet the specified conditions within the designated timelines.
What challenges does Cyprus face in completing the LNG terminal project according to recent reports?
According to recent reports, Cyprus is facing challenges in completing the LNG terminal project, with doubts raised about meeting the deadline for project completion. Without a responsible dialogue with the European Commission and diligent monitoring of the project’s advancement, there is a risk of grant reduction or even total withdrawal. Efforts must be made to ensure the timely and successful completion of the LNG terminal project in Vasiliko.
