Gas supply agreement to be signed this week

The crucial agreement between the ElectroGas consortium and the Maltese government, through which the consortium will be providing a substantial part of Malta’s energy needs for the next 18 years, will be signed this week.

“The new power and gas project is progressing as planned,” a spokesperson for Energy Minister Konrad Mizzi told MaltaToday yesterday, after Nationalist deputy leader for parliamentary affairs Mario De Marco on Monday’s Reporter on PBS repeatedly asked minister for the economy Chris Cardona whether the government had signed the agreement with ElectroGas.

Cardona evaded the question, insisting that the government was abiding to its schedule of decreasing electricity bills as from this year.

The government reduced utility bills by 25% in March, a pledge that was Labour’s major plank during the 2013 elections and also conditional on the construction of a new plant fired by liquefied natural gas (LNG).

When asked point blank by presenter Saviour Balzan whether the agreement had been signed or not, Cardona replied that he was not the minister responsible for energy. 

Earlier this week a European Commission report expressed concern that “delays” in the planned construction of the new power plant posed a downside risk to otherwise “robust” growth projections.

But the energy ministry made it clear the project will be delivered in line with Enemalta’s business plan, and accused the Opposition of “consistently trying to create obstacles in the process.”

It confirmed that the gas plant agreement would be signed this week with ElectroGas consortium.

ElectroGas was chosen as the preferred bidder for the new gas purchase agreement in October 2013. In December, the tender was officially awarded to ElectroGas after the consortium submitted a final price of 9c6 per kWh, for the supply of gas during the first five years of the 18-year agreement.

The ElectroGas consortium is formed by the Azerbaijan state gas company SOCAR, German multinational Siemens, West African owned Gasol plc, and local GEM Holdings Ltd which includes the Gasan and Tumas groups.

On 24 March 2014, MEPA issued a planning permit for the berthing of a massive LNG tanker in Marsaxlokk bay where the gas supply for a new power station and the existing BWSC built plant will be stored. MEPA has yet to issue an Integrated Pollution and Prevention Control (IPPC) permit.

Three days before the permit was approved by MEPA, Prime Minister Joseph Muscat claimed that the Maltese government had “an agreement” with Electrogas to remove the LNG tanker once a gas pipeline connecting Malta to the rest of the EU is in place.