Labour’s energy time-frames ‘unlikely’ but ‘not impossible’ – UK expert

An independent environmental safety experthas said the two-year time-frames that the Labour Party have pledged for the completion of a proposed LNG terminal are "very unlikely, but not impossible."

Miles A. Seaman was speaking during a press conference hosted by the Nationalist Party, during which Seaman said he was requested to give his insight by the Nationalist Party into Labour's proposals to construct a gas power plant.

In a measured and overall cautious statement considering several aspects of Labour's proposals, Seaman said that an LNG terminal in Malta would require the design and construction of the "safety case" for the LNG storage tanks.

He said the process for the design and construction of the safety cases alone for such a project requires would "typically take 9 to 12 months."

He said that such a timeframe would be required for the project to "reach the starting point "before the detailed design and implementation stage can be reached.

Seaman added that, taken into consideration with the fact that the LNG plant required by Malta, and the resulting complexity in terms of design and construction, "one can expect that a build of this sort would take certainly two to three years after one obtains permission."

Seaman said "the figure, quoted in the press, of two years, is very very ambitious."

At the same time, Seaman said "one cannot say it is impossible to do things."

Seaman also said that "there is no doubt that major hazards are an issue as far as LNG terminals are concerned." He added that "this has been the case ever since LNG terminals started to be built due to the storage of a very large amount of relatively volatile material."

He said that such gas is hazardous because the tanks contain large quantities of gas that can cause fires and explosions if it escapes. "The LNG terminal can affect area which are relatively distant from the installation itself, probably up to a kilometres or two away," he said.

However, Seaman was cautious. "Terminals of this sort can be built in the sense that there is no bar to building them. But they need to be designed so that the risks are mitigated in the situation one is talking about."

He also noted that in his experience, there is also a marine component that should be considered in the project, "because of the potential vulnerability of ships in their manoeuvres when actually delivering LNG."

He noted that the interesting element about Malta's proposal is that "they are at the very small end of LNG plants worldwide," which, Seaman said, "begs the question of the availability of ships to transport this material."

He added that this raises "the possibility, or rather difficulty of shipping part-load on larger tankers which has both safety and commercial implications."

Seaman also discussed the desirability of an LNG-type facility as opposed to a pipeline.

He noted that "from a safety point of view, there is less inherent risk from pipelines than there is from these large volumes of LNG being managed in this situation."

"There is a very clear win for pipelines over LNG," Seaman said. "That is not to say that LNG cannot be built safely. But it gets a lot more difficult."

He also pointed to the fact that the small size of the proposed plant will have an effect on its economic viability: "It will be somewhat more costly in capital terms than a very large LNG terminal which is typical of what is built elsewhere around the world."

Asked by the media to comment regarding the availablity of ships to transport LNG gas to Malta, Seaman said that Malta would require smaller ships than normal to transport the gas.

"Typically, LNG tankers carry 100,000 and more tonnes of LNG gas. Malta's requirement is around 20,000 tonnes. One would be looking for ships are capable of doing that."

He said that the situation is that those ships which are small enough to carry such a capacity would be likely to be tied up in contracts already.

"Given that there are a small number of ships, it is quite likely that how to provide those ships will be an issue."

At the same time, Seaman said that "I don't know the precise answer because I don't know it, but I am giving you an opinion," before going on to add that "It is probably a question of Malta having to build these ships."

Asked about the viability of Labour's proposed 10-year-long power purchasing agreement, Seaman prefaced his answer by saying that it falls out side his area of expertise.

"My knowledge of industry tells me that the market is a strong market driven by contracts. The likelihood is that, when a purchasing a 10-year-advance contact, you'd have to be building in significant price inflation."

He however noted that the gas market has recently been effectively disrupted by existence of FRAK gas in the US, meaning "a lot of gas is being produced there for domestic consumption."

This, he said, has reduced the amount of LNG being delivered at the moment, adding that, at the same time, as the LNG market moves on "resources become always more scarce, so buying long-term at fixed price contracts would be expensive."

Asked about the cost of incurred to the taxpayer by the commissioning of KPMG's report which Finance Minister Tonio Fenech unveiled on Monday, Fenech said that the report took five days to be drawn up, and that it cost €3,000.