Cyprus is under mounting pressure to return €67.2 million in EU funding linked to the troubled Vasilikos liquefied natural gas (LNG) terminal, after the European Commission’s financing arm, CINEA, issued a final demand for repayment.

Energy Minister George Papanastasiou confirmed that the decision is definitive, with repayment due by November 6 to avoid interest charges. The government is consulting the Attorney General’s office, which has sought advice from British legal experts, before deciding whether to appeal to the European Administrative Court or lodge a complaint with the European Ombudsman.

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So far, Cyprus has received €73 million out of a total approved EU grant of €101 million. Of this, €67.2 million is being clawed back, while the remaining funds—mostly for pre-award studies—are not being contested.

The Vasilikos LNG terminal was intended as a vital step toward diversifying Cyprus’s energy supply, but it has instead become mired in disputes, delays, and soaring expenses.

Six years after contracts were signed, only about half of the onshore and jetty works have been completed. The project’s total budget has already reached €289 million, with the state covering over €230 million, including €185 million for the floating regasification unit Prometheus.

An additional €10 million has already been spent on arbitration with the contractor, and costs are expected to escalate further.

Despite the financial setback, the Energy Ministry maintains that its top priority is completing the terminal and securing the arrival of natural gas in Cyprus. Speaking to Alpha TV, Papanastasiou underlined that assigning blame or opening new investigations is not on the ministry’s agenda, given limited resources and the urgency of finishing the project.

The government is now awaiting a final report from the French engineering group Technip, expected within two months. The report will assess design and construction gaps. Depending on the findings, Cyprus may need to either revise the project’s design or relaunch tenders—both options carrying the risk of further delay.