[WATCH] Energy Commissioner Sefcovic tours Delimara power plant

Sefcovic tours ElectroGas facility with Konrad MIzzi and CEO Catherine Halpin

The EU’s energy commissioner Maros Sefcovic is in Malta today for a tour of works at Delimara for the 215MW natural gas plant.

Plans for a gas pipeline between Malta and Sicily rank second in the European Commission’s scoreboard for projects intended to create an energy union, the Times of Malta reported today. The proposal is viewed by Brussels as “very important” for its aim to further diversify energy supplies and end the island’s gas isolation from the mainland, according to sources close to the Commission.

The LNG plant at Delimara is a lynchpin in Labour’s energy plan for reduced tariffs.

But it is also controversial because it will depend on a as-yet-unknown 18-year pricing agreement with the ElectroGas consortium – which consists of Siemens, gas supplier SOCAR of Azerbaijan, and Maltese business groups Gasan and Tumas – for the provision of gas.

The gas will also be sold to the Delimara phase 2 power station, which is powered by BWSC turbines currently running on heavy fuel oil.

The Opposition is insisting that the government publish all agreement with ElectroGas.

Controversially, the government issued guarantees in favour of a bridge loan issued to ElectroGas until the European Commission issues its clearance on a Security of Supply investigation. The Security of Supply Agreement is an integral requirement for lending banks to finance the project and was part of the original tender.

Countries that rely on fuel that must be constantly imported to power their electricity supply expose themselves to potential energy security issues, including fluctuating international market prices and disruptions to fuel supplies caused by geopolitical disturbances.

The installed electricity generation capacity by thermal power plants was 620MW in 2012 with the addition of the BWSC turbines. This does not include an additional 225MW interconnector to Sicily, and the forthcoming 215MW LNG plant.