When greed killed a gas pipeline

In 1999 the Italian energy giant Eni wanted to pass a gas pipeline from Libya to Sicily through Malta but they abandoned their plans because when they approached the Maltese, they found them to be "too greedy". The bribes they asked for were too high.

These bribes must have been very high. At the moment Italian magistrates are holding an inquiry into the Algeria-Italy pipeline project which cost €11 billion to see whether as much as €197 million were paid in bribes for this project to happen. The Libya to Italy pipeline cost €7 billion so possibly a bribe of €120 million would have been considered acceptable. Yet the Italians were shocked by the greedy Maltese as they must have asked for more than is normally considered acceptable to carry out such projects.

Landing the pipeline in Malta would have meant that Malta did not have to pay for it. Malta would have had the security of supply and would also be guaranteed very good pricing.

Since 2004, when the gas pipeline started operating, Malta would have been able to fire its power stations on gas, a cleaner and cheaper source of energy.

Italians involved in the project say that the Maltese who had the power to give the go ahead to pass the pipeline through Malta asked for a very high bribe and so Italy decided to reroute the pipeline and pass it offshore to the west of Malta and outside Malta's territorial waters.

The pipeline called 'Greenstream' is 540 km long. It is the longest pipeline ever built in the Mediterranean and crosses the sea in places where the sea is 1,100 metres deep.

It would have made a lot of technical and financial sense to pass the pipeline through Malta as the island lies two thirds of the way from Libya to Sicily.

The pipeline cost €7 billion and was financed jointly by Eni and the Libyan National Oil Corporation.

The idea of a pipeline carrying natural gas from Libya to Italy originated from the 1970s. Feasibility studies were carried out in the 1980s and 1990s. Construction of the pipeline started in 2003.

The gas supplies to Italy from Libya started on 1 October 2004 and the pipeline was inaugurated on 7 October 2004 by Silvio Berlusconi and Muammar Gaddafi. The Greenstream pipeline is 540 kilometres long and it runs from Mellitah in Libya to Gela, in Sicily, Italy. It includes also the Mellitah compressor station and the Gela reception terminal. The pipeline is supplied from the Bahr Essalam offshore field, Bouri Field and Wafa field near the Algerian border, 530 kilometres from Mellitah. The construction cost €7billion. The pipeline has a diameter of 32 inches (810mm) and an initial capacity of 8 billion cubic meters (bcm) of natural gas per year. Later, the capacity was increased to 11bcm.

The pipeline is constructed and owned by Agip Gas BV, a joint venture of the Italian energy company Eni and the National Oil Corporation of Libya.

In 1999 Egidio Ibba, the Operations Manager of Impresasub srl, an Italian company that carried out major submarine works including the laying of submarine pipelines had told a friend that Eni was planning to build a gas pipeline from Libya to Sicily and had tried to pass it through Malta on land.

Eni people had told Ibba that they had to abandon plans to pass the gas pipeline through Malta but the plans fell through because of the Maltese's apparent "greed".

Having this gas pipeline passing through Malta would have meant getting Malta off its dependency on oil and the capacity to operate its Marsa and Delimara power stations on gas since 2004.

On 5 May 1999, a delegation from Italy came to Malta to explore the possibility of saving Malta's golden opportunity to have the Libya-Sicily gas pipeline pass on land through Malta. But it was clear that it was already too late.

By 24 May 1999, the Italians had already made alternative plans and their local contacts were informed through the 24 May 1999 fax that "the planned linkage between Italy and Malta does not foresee any landing on Malta and in fact will pass on the outside of Maltese territorial waters".

Efforts were still made with Egidio Ibba and Vargetto of Impresasub srl to try and have the gas pipeline pass through Malta. On 28 May 1999, Minister Josef Bonnici was informed that there was still a possibility to save Malta's involvement in the project.

At the time, Rinaldi was running Italian energy company Agip and Pier Luigi Bersani, the present leader of the Democratic Party in Italy, was the minister responsible for Industry. The Maltese government was told that these were the persons to be contacted and persuaded if anything was to be done to save the original project of having the Libya-Sicily gas pipeline pass on land through Malta.

In June Egidio Ibba called his contacts in Malta to inform them that Agip were going ahead and excluding Malta from the project and it is "Malta's fault that they had to move away from the original project because Malta was greedy".

Ibba said that the Italians had no interest and that they did not wish to start again with the process now that they had decided on the alternative route of the pipeline and were actually about to issue the tender for the survey of the sea bed to prepare to start works.

Ibba told his Maltese contacts that the only way to change Agip's decision was to talk directly to the Italian government who could force Agip to change the new route.

Agip said that if Malta wanted, it could have a "branch off" but admitted that as the main pipeline was going to be now passed outside Maltese territorial waters this would be very costly and it would need the consent of both the Libyans and the Italians.

Evarist Bartolo is shadow minister for education