Larnaca councillor resignation may lead to new vote on hydrocarbons firms

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By Stelios Orphanides

The resignation of Haris Constantinides, a DISY Larnaca municipal councillor who abstained from the crucial February 8 vote which effectively evicted hydrocarbons companies from Larnaca may lead to a new vote and a possible revision of the decision, as an attempt to relocate hydrocarbon companies to Limassol appear to have come to a stall.

Constantinides’ successor is Elias Plastiras, also a member of the DISY faction, the Larnaca district officer Odysseas Hadjistephanou said in a telephone interview on Wednesday. Plastiras, third runner up in the 2011 municipal elections, was declared a member of the council after the  second the runner up declined to be nominated and first runner up succeeded another councillor who resigned two years ago.

Plastiras declined to immediately comment about his intentions with respect to Larnaca’s decision not to renew French energy giant’s Total request for an extension of the use of the Larnaca port for its operations in Cyprus’s exclusive economic zone, when contacted by the Cyprus Business Mail.

“I haven’t been briefed,” he said adding that in case the council would vote again on the matter “we would study the matter and weigh pros and cons for the town’s benefit”.

Larnaca mayor Andreas Louroutziatis said that the change in the composition of the municipal council does not necessarily imply that it will change its decision.

“If there is something new, the municipality will look into it,” he said.

Chances for a new vote have increased after minister of transport Marios Demetriades and his colleague energy minister Yiorgos Lakkotrypis met representatives of the hydrocarbon companies on February 15 to discuss how the latter could move their base from Larnaca to Limassol. The parties agreed then to set up a committee that will look into the matter before announcing its recommendations ten days later.

“They haven’t had one meeting let alone recommend anything on Limassol,” a source familiar with the matter said.

Demetriades and the transport ministry’s press officers were immediately unavailable for a comment.

The source who spoke on condition of anonymity, added that the hydrocarbon companies asked the government to provide convincing answers to open questions with respect to the use of the Limassol port a day before the cabinet ratifies the successful bids for the privatisation of its commercial operations. The questions are related to who the hydrocarbon companies’ contract partner in an agreement to rent an area at the port will be, the price of the annual rent, the duration of the contract and to which extend the contract will be binding.

“Will the committee decide later on a new place?” the source asked. “Will they have to invest in new facilities, again millions of euros? There are many question marks”.

The privatisation of the port’s commercial activities could also negatively affect the operations of the hydrocarbon and logistics companies by assigning a lesser priority to servicing their vessels, the source continued.

“In the oil industry you cannot stop an incoming supply vessel” supporting drilling operations, the source said. “You have to let it go freely as the rate costs €1m every day. There cannot be a delay”.

“These are guarantees that the industry is requesting from the government,” the source said. “The government promised to reply on Friday and until Tuesday there was no reply”.

Given the above, it is likely for Larnaca’s municipal council to vote again on the matter and take a favourable decision, the source said, adding that also some of those councillors who voted against extending the use of the town’s port by Total for a further six months could vote in favour in a new vote which would allow the hydrocarbons companies use Larnaca permanently. “They want it to be there as part of an organised plan,” the source added.

“After voting no, the Larnaca council now knows that there is a committee which will decide on a permanent location for the logistics companies,” the source said. “Larnaca needs to stay in the game. If the committee rules out Larnaca, it will be out of the game for ever”.

A spokesperson for Averof Nefytou, chairman of DISY, who repeatedly criticised the February 8 decision by the Larnaca municipal council, said that while his party respected the decision-making process of local administration bodies, he hoped that “in the case there is a new vote though, the outcome will be positive”.

On Tuesday, the Cyprus Oil & Gas Association, a business group representing the hydrocarbon industry, asking authorities to speed up their decision.

“We urge the government to give a strategic direction in this pressing issue in immediately solving it by choosing and preparing a suitable port to serve the needs of the companies,” the association said in a statement signed by its chairman Andy Varoshiotis. “Our position is that the land base that will serve the activities of the oil companies should be found and established without any further delays”.

All possible options, including Limassol, Larnaca and the area of Vasilikos must be examined, the association said.

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