EurOil: Cyprus FSRU project stuck in limbo as government and contractor head to arbitration

The future of Cyprus’ energy transition from heavy fuel oil to natural gas for energy generation hangs in the balance over the outcome of a meeting planned in the coming days between Cypriot government representatives and executives from the Chinese-led coalition tasked with constructing a functioning LNG delivery terminal and delivering a floating storage and regasification unit (FSRU) at the island’s energy center at Vassilikos.

The outcome of the meeting will determine whether the two parties wind up in a London arbitration court, which in itself may not end the state of limbo where the €300mn project languishes.

Energy Minister George Papanastasiou said last week that the project would either be completed by the current contractor or other solutions would be sought. He has stated previously that the government would not rule out terminating the deal – although that would inevitably delay the project further.

If you’d like to read more about the key events shaping Europe’s oil and gas sector then please click here for NewsBase’s EurOil Monitor.