EU seeks USD109.17M from Cyprus over abandoned LNG project amid corruption probe
(MENAFN) The European Union is pursuing approximately €100 million (USD109.17 million) from the Cypriot government following the abandonment of a liquefied natural gas (LNG) supply terminal project that was led by a Chinese consortium and is currently under investigation for corruption. In 2018, Cyprus awarded a €542 million contract to develop the Vasilikos LNG terminal to a consortium that included China petroleum Pipeline, Hedong-Chonghua Shipbuilding, Norway’s Wilhelmsen Shipmanagement, and Britain’s Metron. The terminal was intended to reduce the country's reliance on imported oil, with an initial completion date set for 2019. However, the project encountered significant delays, with the deadline first extended to 2022 and later left open-ended. Ultimately, the deal fell apart on July 18, amid allegations that the consortium had not fulfilled its contractual obligations. China Petroleum Pipeline has since sought international arbitration in London, demanding €200 million from Nicosia.
On July 24, the European Climate, Infrastructure and Environment Agency (CENEA) requested that the Cypriot government clarify how EU funds allocated for the project would be utilized and expressed a desire to recover part of the €101 million provided. Cyprus has reportedly used €69 million of this funding. The following day, the European Public Prosecutor’s Office announced an investigation into the LNG terminal project, citing concerns over procurement fraud, misappropriation of EU funds, and corruption. Cyprus's Energy Minister, Giorgos Papanastasiou, acknowledged the gravity of the situation and requested an additional 30 days to respond to the inquiry. President Nikos Christodoulides criticized the previous government's choice of consortium but affirmed that the project would proceed. The European Public Prosecutor’s Office based its investigation on a January report from the National Audit Office of Cyprus, with CENEA also contributing information.
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