The former contractor for the liquefied natural gas (LNG) project at Vasiliko on Thursday laid the blame squarely on the Cypriot side, accusing it of incompetence and of often acting in bad faith.

In a lengthy statement, CPP-Metron Consortium Ltd (CMC) gave its own version of events, responding to media reports in Cyprus, particularly following the recent discussion of the matter at the House energy committee.

CMC complained it had no knowledge of the meeting nor was it invited to attend.

Going through the history of the project, it recalled that it signed an Epcoma (Engineering, Procurement, Construction, Operation and Maintenance Agreement) with the Cypriot side in December 2019.

But actual commencement of the project happened almost ten months later, in September 2020.

“There were two excuses/reasons for the delay…the unavailability of funds until May 2020 and… huge delays in appointing the Owner’s Engineer until late 2020,” the statement read.

An Owner’s Engineer (OE) is an independent third-party consultant hired by a project owner – Cyprus in this case – to act as their advocate and technical advisor throughout a project’s lifecycle. In the industry, an OE is also known as the owner’s “eyes and ears”. The OE selected by the Cyprus government was Hill International.

Technically, the project owner was the natural gas infrastructure company, Etyfa.

CMC outright says of Etyfa that it “clearly” lacked “the relevant knowledge, experience and expertise to handle such a project…”

It goes on: “Etyfa had only one engineer on board that not only had zero experience on similar projects, but zero project experience of any kind of project.

“Etyfa later on hired another engineer to assist who unfortunately also had zero experience in similar projects and managing projects. Did Etyfa’s Owner’s Engineer have any experience in similar projects? According to the website at that time, it had zero experience in any oil and gas project.”

Citing what it claims were the “true reasons” for project termination, CMC claims that “Etyfa from the beginning of the project was delaying payments and always finding cheap excuses.”

The first example of this, according to CMC, was that under the Epcoma, the Cypriot side was supposed to have paid the contractor €60+ million after the vessel’s arrival at the Shanghai shipyard in August 2020.

“This amount was only paid at the end of February 2021.”

What’s more, “this tactic of delayed in payments from Etyfa was the rule throughout the project. It is interesting to mention that the next payment after the end February 2021 only took place in late July 2022, 16 months later.”

The consortium alleges that, throughout, it was “forced to…to finance the cash flow of the project although this is fully against the principles and the clauses of the Epcoma”.

Nevertheless, it continued working on the project. But by January 2024 it had become “extremely difficult” to continue without being paid and was forced to suspend the works.

“After assurances from the minister of energy himself that payments will be harmonised and be on time, CPP resumed works in March 2024.

“Unfortunately, Etyfa failed to fulfill the minister’s promise and did not make any payments to the contractor in 2024…CPP was forced to terminate the project on the July 18, 2024, strictly following the Epcoma.”

The former contractor goes on to allege that, following termination, no proper handover took place.

“There is no single piece of paper that Etyfa confirms what they did receive and what the condition was.”

In early 2021, “Etyfa decided to unilaterally alter the Epcoma and its scope by demanding that the jetty be cryogenic. A cryogenic jetty is needed only when exporting LNG, yet Cyprus does not have the facilities to export LNG.

“In plain words, Etyfa was forcing CPP to build a boat engine without having any idea about the size of the boat or the cargo it would be carrying. This resulted in significant project cost increases of more than €100 million.”

The Chinese-led consortium moreover claims that Etyfa “refused” to meet with them to discuss problems arising from these requested changes.

This left them no choice but to “ask support from the London Court of International Arbitration, in February 2023”.

CMC also dismissed as false any claims of unsafe equipment being used. All equipment and materials, as well as all the vendors, were pre-approved by Etyfa and signed off on by Hill International. Plus, all critical equipment and materials underwent factory acceptance tests before leaving the factory.

The consortium likewise called groundless any claims of design problems, saying that “every single drawing and design document” was reviewed and approved by Etyfa and Hill International.

Regarding the floating, storage and re-gasification unit (Fsru), the former contractor dismissed as “false” allegations that the vessel is incomplete or missing critical components.

“On December 9, 2024, at the time of vessel delivery, Lloyd’s Register issued an Lngc (Liquefied Natural Gas Carrier) certificate that identified 12 outstanding works, all related to incomplete jetty works. It also included three pending actions, which were successfully completed before delivery of the Fsru to Etyfa, which resulted in the issuance by Etyfa upon vessel delivery of the Provisional Acceptance Certificate. These did not include the two additional components publicly claimed by the [Cypriot] minister of energy.”

What’s more, “Etyfa never informed CPP officially or unofficially of any missing components or any problems with the Fsru. CPP only became aware of any problems from media reports.”

Elsewhere, the consortium denies that it had held the Fsru vessel “at ransom”. And it challenges the Cypriot side to produce any documents or court orders demonstrating this.

“On the contrary, the Fsru was ready for the owner to receive but he delayed for 11 months.

“Etyfa was proven to be incapable, incompetent and unprepared to receive the Fsru, not able to provide mandatory documents and certificates for sailing until end of November 2024 and trying to resort to spreading false and inaccurate statements and conducting communication trickery.”

Concluding, the consortium said that “out of a sense of responsibility to Cypriot taxpayers, CPP is willing to maintain constructive dialogue to explore ways and solutions for the project to be completed as soon as possible.”