Gas pipeline is still a ‘proposal’ to Europe, and was made this year - OPM

Replying to questions by MaltaToday, following Prime Minister Lawrence Gonzi's Budget replica last Wednesday, a spokesman for the Prime Minister explained that "following several lobbying efforts made by government, the need to link Malta to the European gas network was recognised in the European Council Conclusions of 4 February 2011 and was followed up by the European Commission in its proposals for the next Multiannual Financial Framework published in June 2011, in which a new EU Fund - the Connecting Europe Facility - is being proposed to be set up to ensure energy security throughout Europe. One of the identified projects is a gas pipeline to Malta. It has to be noted that due to Malta's size a gas pipeline connection is only feasible with EU funds."

The spokesman added that the gas pipeline proposal was made after the approval in March 2010 of EU funding - under the European Economic Recovery Package - for the co-financing of the electricity interconnection to Sicily for the importation of electricity.

When asked on the estimated cost for such a project, the Office of the Prime Minister said that the studies are "planned to take place in the short-term."

The reply seemingly forgets that Enemalta has recently published a report commissioned by economist Gordon Cordina, which estimated the cost of a gas pipeline at €273 million.

According  to government, it is envisaged that a natural gas connection to the European gas network would be to the nearest European grid connection point which is in Sicily.

"The link will ensure a positive impact on both Malta's industrial and domestic sectors. It will also reduce the reliance on fuels imported by sea, and contribute significantly to enhancing of energy security," the spokesman said.

But it was also explained that  "the decision as to whether the pipeline is to be used to supply the power station or households or both will be taken on the basis of a cost-benefit analysis. "

In Enemalta's estimation of economic costs of operation of the Delimara power station extension, using different types of fuel, Gordon Cordina features the use of gas for firing the plant apart from Heavy Fuel Oil (HFO) and gasoline.

Cordina says that "the existing plant and the plant acquired for the Delimara power station extension are considered to be "sunk" decisions, which are not influenced by the fuel choice. On the other hand, the equipment already available and committed to is a determining factor in the choice of the type of fuel."