The European Union is seeking to recover up to 100 million euros from Cyprus after a Chinese-led consortium abandoned a gas import terminal project in Vasiliko now under investigation for corruption, EU officials said on Wednesday.
The 542-million-euro Vasiliko liquefied natural gas terminal contract was awarded in 2018 to a consortium including China Petroleum Pipeline (CPP), but the deal collapsed on July 18 amid allegations of contractual breaches.
Cyprus has already received 69 million euros of a 101-million-euro EU grant for the project, according to Cypriot officials.
The EU’s climate and infrastructure agency, Cinea, has requested explanations from Cyprus about the use of EU funds by September, sources familiar with the matter said.
The European Public Prosecutor’s Office (EPPO) has opened an investigation into suspected procurement fraud, misappropriation of EU funds and corruption related to the project.
Cypriot Energy Minister Giorgos Papanastasiou said the government had requested 30 days to respond, adding that recent developments “put the country at risk”.
The audit office had repeatedly raised concerns about delays, rising costs, and quality issues.
CPP has initiated international arbitration in London, seeking 200 million euros from Cyprus.
Etyfa, Cyprus’s natural gas infrastructure company, terminated the agreement on July 18, citing contractual violations by the consortium.
Papanastasiou said a new tender would be issued shortly, aiming to complete the project within eight months.
The consortium members and Etyfa did not respond to requests for comment. The EU Commission acknowledged awareness of the investigation but declined further comment.
