The government on Monday revealed it is asking for an extra €70 million to complete works at the liquefied natural gas (LNG) terminal at Vasiliko, a project plagued by delays and the Chinese contractor’s walkout last year.

Energy Minister George Papanastasiou told MPs the €70 million will be done through increasing the share capital of Etyfa – the state-run natural gas infrastructure company – by the corresponding amount.

The additional amount will be used for the remaining works at the land-based LNG terminal. Contracts for the pending works would be awarded in the coming days, the minister said.

Papanastasiou said Etyfa had been set up as a special-purpose vehicle for the construction of the LNG facility.

The state-run agency had originally budgeted €295 million, but later an additional €25 million was given, bringing the total to €314 million. Now, an extra €70 million is needed.

On the timetable for completion, the energy ministry awaits a detailed briefing from Etyfa. However, Papanastasiou reiterated that the target remains by the end of the year.

Kyriacos Hadjiyianni, the Disy MP who chairs the House energy committee, stated that the request for funds raises more questions.

He pointed out that references to government revenues from the sale of natural gas – be it for fiscal years 2025 or 2026 – are nowhere to be found in any documents. This casts serious doubt on the promises that the LNG facility will be ready by year’s end.

“Clearly this shows that planning is non-existent…we don’t know where this €70 million will go,” the MP stated.

For this reason, parliamentarians asked the government to submit a memo on how the money will be spent and when.

“All this must be cleared up, otherwise many MPs will not blindly acquiesce to approving another €70 million for a project proceeding so slowly and navigating in muddy waters.”

The government’s €70 million ask will be discussed at the House plenum this week.

Hadjiyiannis said that, unless MPs get satisfactory answers, they would ‘cross’ items on this budget.
‘Crossing’ means marking spending items as pending, so that if the budget as a whole is passed, government officials must later come back to parliament and specifically request the release of the amounts concerned.

The LNG contract was awarded in 2019 with a 24-month deadline for completion.

The Chinese-led consortium subsequently submitted four delivery timetables – September 2022, July 2023, October 2023 and July 2024.

In July 2024, the Chinese contractor unilaterally pulled the plug, citing insurmountable differences with the Cyprus government and claiming unpaid invoices.