“Speaking to International Oil Daily, Gasol Chief Operating Officer Alan Buxton said the success of the project relied on the recent landslide victory of the Labor Party, which came to power in March.” – Energy Intel
The reputable energy news site, Energy Intel, carries a piece about the Malta power station, which includes the quote in the title to this post.
I’ve given you the link to the original article, but you need a subscription to read it. In any case, here it is.
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Malta Completes LNG Import Plans
The Mediterranean island of Malta completed an LNG import tender this week, with its newly elected government awarding preferred bidder status to a consortium including Azeri state champion Socar, German engineering giant Siemens and a trio of Maltese businesses. The €370 million ($502 million) contract is for the delivery of LNG to an existing 149 megawatt plant and the construction of a new 200MW gas-fired CCGT plant.
The consortium is led by tiny AIM-listed Gasol, which also has a strategic alliance agreement with Socar through its trading subsidiary for a proposed LNG import terminal in Benin (IOD Dec.21’12).
Speaking to International Oil Daily, Gasol Chief Operating Officer Alan Buxton said the success of the project relied on the recent landslide victory of the Labor Party, which came to power in March. With electricity costs at €0.18 per kilowatt hour (24¢), the new government promised to reduce household energy bills by 20% and fast-tracked the LNG project in a first step to achieving that goal.
“We hope to have the project particulars finalized by March 2014,” said Buxton. After the start of construction, it will take another 18 months to get the floating storage unit (FSU) in place. By September 2015, delivery of the first LNG shipment is expected and the consortium should start seeing returns on its investment, he said.
Socar’s marketing arm Socar Trading will lease a “mid-sized” FSU, which it will in turn lease to the project on an 18-year basis. The regasification capability will be onshore for efficiency reasons. The LNG will also be supplied by Socar Trading, which Buxton said has already received commitments from LNG producers to supply “100% of the necessary cargoes,” adding that the suppliers are confidential. The consortium has opted for 126,000 cubic meters of storage, allowing the FSU to receive around 10 to 12 shipments annually — some 630,000 tons.
Although a major crude oil producer and exporter, Socar has no LNG capability, having neither equity nor portfolio capacity, and securing the super-chilled gas in an increasingly illiquid market could come at a premium (PIW Oct.14’13).
Speaking at the Mediterranean Conference Center in Malta, Energy Minister Konrad Mizzi said the Gasol-led consortium will sign an 18-year agreement and provide a fixed price for five years. The initial price, which will be revealed after an appeals process by the losing bidders, will then be indexed for the remainder of the contract term, but will still be cheaper than the price offered by oil-powered plants, Mizzi said.
The decision to award the LNG tender coincides with the European Union announcing on Monday that a proposed gas pipeline between Malta and Sicily has qualified, with other energy projects, for funding from a €5.85 billion ($7.95 billion) pot.
The proposed 150 kilometer pipeline would run from Gela in Sicily to the FSU some 12 miles offshore Malta’s Delimara power plant.
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http://www.energyintel.com/Pages/ArticleSummary/825155/Malta-Completes-LNG-Import-Plans
Speechless.
September 2015? Wasn’t it March? And that’s assuming there’s a power station ready to burn the gas.
“…the success of the project relied on the recent landslide victory of the Labor Party…”
Ah, so the project was alive already at the time of the landslide victory.
Now that’s a blooper.
Tsk, why doesn’t this Buxton keep his trap shut?
Dak CEO eh?
Energy Minister Konrad Mizzi said the “Gasol-led consortium will sign an 18-year agreement and provide and provide a fixed price for five years”.
God knows what will happen to our utility bills after the first five years where the price will no longer be fixed.
The strategy of this Government is crystal clear – win the next election, continue to make hay while the sun shines and then they just don’t give a dime about what happens to this country afterwards.
They might not have a roadmap how to govern this country but they surely have one how to look after themselves and their cronies.
According to the above article, we have it from the horse’s mouth that the project will not be completed by March 2015.
Can anyone give us a link showing Muscat saying that he will resign if the project is not completed within two years from the last election?
Muscat might as well resign NOW.
Searching….yep, major slippage.
It’s the taht it-tinda video with Marco Cremona.
Delivery of first LNG shipment is expected in September 2015
Haven’t you understood that Muscat would not give a damn on what he promised you?
He will supply the highly efficient BWSC power station built by the nasty PN with natural gas from a ship anchored 12 miles offshore… that’s Muscat’s burst Budget surprise.
With the BWSC plant, EneMalta lowered the fuel (HFO) cost by some €30million, now it will reduce further its costs when it converts it to run on natural gas.
Obviously, the deals were done before the elections.
“He will supply the highly efficient BWSC power station built by the nasty PN with natural gas from a ship anchored 12 miles offshore… that’s Muscat’s burst Budget surprise.”
It’s not as easy as you say. To do that, he would need a Floating Storage and Regasification Unit anchored out there. Those behemoths are not readily available – the ones being built in the few shipyards around the world which specialise in that sort of technology already have a destination for their use.
He can of course use the Euro 30 million which he will derive from selling an empty-box company to hire one by taking it off its existing use. Still unlikely because so far there are only a few in operation.
But an FSRU 12 miles away from Malta needs proper pipelines laid down under the sea. There is no way this can be done by March 2014.
In fact, if Electrogas is planning to build a new, or convert, an FSU for Malta – I cannot see where else they are going to find one because the ones that exist have a use and it is unlikely that the existing use can be suspended – then this project will only be ready somewhere in 2017, about 1 year before the elections.
But by that time, Muscat would have invested about Euro 500 in a high quality colour printer, and would be printing Maltese passports on a 24/7 basis to subsidise the losses in the electricity division of Enemalta. Passaporti bhal pastizzi.
http://www.timesofmalta.com/articles/view/20130112/news/If-energy-plan-fails-I-go-says-Muscat.452868
Thanks all for your comments, but we need a video of him saying it. This is a major issue. Having Gasol’s COO declaring that the project will not be finalised before September 2015 simply means one thing – more uncertainty. The country simply cannot move on knowing that the Prime Minister will be resigning in 16 months time.
There is some information in there which is not necessarily 100% consistent, and therefore possibly untrue and/or confusing.
It seems that instead of an FSRU (Floating Storage and Regasification Unit), Electrogas will have an FSU, with a regasification plant on shore. In my view, this means that the FSU will be docked within the harbour.
The document published by Gasol on 14 October 2013 (and later withdrawn), shows the FSU within the Marsaxlokk harbour. See picture here:
http://www.independent.com.mt/articles/2013-10-17/news/gasols-malta-venture-will-provide-diversification-from-its-current-focus-2911797251/
The last line in the Energy Intel report seems to suggest that the FSU is going to be around 12 miles offshore where it can, in future, be connected to the European gas pipeline.
Based on my very limited understanding, the FSU cannot be located 12 miles offshore without a regasification plant on it. Gas cannot be transmitted to land over such a long distance in a liquid state to be regasified on land. Gas travels in pipelines only as a gas. Pipelines do not have the temperature control mechanisms which are necessary to keep the gas as a liquid.
Besides, one needs to question whether the capital cost of euro 370 million is inclusive of the cost of the FSU which is going to be ON LEASE from SOCAR.
Alan Buxton is suggesting that the project will have a 6 months delay. Joseph Muscat should start getting worried.
It is in fact a contradiction to have an FSU 12 miles offshore connected to a gas pipeline from Europe.
LNG is stored in an FSU as a liquid, whereas it is transmitted as gas in the pipeline. Connecting Malta to the European pipelines means that LNG can be fed directly to the powerstation as a gas.
Once the gas pipeline is set up, the FSU will be redundant, or used only for security of supply, possibly.
But will the government of Joseph Muscat ever adopt the pipeline project, if this upsets SOCAR?
How does this fit in Ciccio?
“Turkey signed a gas deal with Azerbaijan in October 2011, not only providing gas for its domestic market, but also sending gas to Europe through its pipelines, reducing Europe’s dependence on South Stream.”
http://ccee.ada.edu.az/selected_news/october_22_2013_-_socar_head_azerbaijani_president_sets_priorities_in_energy_sector_for_next_five_years.htm
Through “South of Italy”?
Just pray they’re holding the details from us.
I suspect they realised the best solution is to have an offshore regasifier/storage rig.
It’s just they won’t admit to it yet, that would make it identical to the PN’s. Otherwise, it’s physically impossible to carry liquid gas 12 miles into Marsaxlokk.
The paradox of insulating the darned thing to regasify it on shore when you could use the length to bring it up to gas.
As for the pipeline rendering it redundant, that’s why it’s leased, even though I honestly cannot understand how that’s going to help costs. Now that the pipeline’s approved the only thing they should be doing is concentrating on it.
It was after all implied in this whole mess, they went after this venture because the PN, read EU, takes forever.
And if the idea is to offload costs after five years, these guys are dangerous.
@Tabatha White
Thank you for the information and your question, because they allow me to extend the argument which I wanted to open with my provocative question about SOCAR.
In fact, from the information we have now, we can conclude that the Labour government would support a gas pipeline if SOCAR has an interest in it, meaning it is guaranteed that it will supply its gas through it.
The information which you provide would suggest that this is already, ahem, in the pipeline.
Now I am not sure how EU competition laws come into this, but then I suppose that if SOCAR shows an interest to build such pipeline as part of other European pipeline projects, Brussels will give the necessary green light.
Actually, the project may not be ready until Spring 2016 as Alan Buxton states it should all be completed within 24 months according to an interview on an another energy website (below).
http://www.equitydevelopment.co.uk/doc/1130.pdf
You mean one of these Ciccio, look it’s by Edison, ExxonMobil and Qatari Holdings. The ones who pulled out.
http://www.edison.it/en/company/gas-infrastructures/adriatic-lng-terminal.shtml
And the winners happily give interviews proudly declaring they don’t have the technology, nor the capital, If that’s not careless tendering.
Actually they’re right, Edision’s is the only one in existence. Fancy that, the only ones who did it weren’t considered.
Anything else is a concept.
http://www.youtube.com/watch?v=xdVR77ozVHY
Perhaps we should have bid, I got my yellow pages and an adsl.
I take it Konrad Mizzi never did come up with that list of 10-year fixed-price gas contracts. How could anyone trust incompetence like that?
“will then be indexed for the remainder of the contract term”
indexed to what ?
More publicity about this is needed:
“The decision to award the LNG tender coincides with the European Union announcing on Monday that a proposed gas pipeline between Malta and Sicily has qualified, with other energy projects, for funding from a €5.85 billion ($7.95 billion) pot.”
I think they’re after the PN’s proposal.
Sounds uncannily similar to an offshore facility which will have its own regasifying capability to pump up to Sicily when the pipeline’s completed.
What remains to be seen is whether the twelve mile branch is our expense.
Idiots. Charlatans. Copycats. Liars.
I think the objective is to use “the strategic position” from the broad and the length of it.
Hilarious, particulars determined March 2014, so what is it exactly Konrad’s signed against?
September 2015 envisaged deadline, isn’t that a year late?
They vouched to reduce tariffs this budget, promising a 30 million donation up front, calculated as the resulting difference over a year.
September 2015 is TWO years away. What happens to the promised sum?
And why should gas from the pipeline pass through the FSU, read mammoth LNG carrier, before finding its way into the power plant?
Oh look it’s 12 miles offshore now, I think they realised half a dozen koppli tal-Mosta weren’t going to fit. And Frankie wants his view anyway.
Hang on a minute, why a liquified storage tanker when the gas will definitely be pumped in gaseous state from Sicily.
What is this? X’tahwid.
Exactly my thoughts Jozef . Dan x’tahwid hu? Why are the PN mum about all this? Are they planning a counter Blitzkrieg?
Minflok jintefqu 350 miljun ewro mhux ahjar taghna miljun ewro kull wiehed ? U ma jkolnix problema biex inhallsu l-kontijiet kif inhuma issa.
This is the cherry on the cake:
“The proposed 150 kilometer pipeline would run from Gela in Sicily to the FSU some 12 miles offshore Malta’s Delimara power plant.”
So Malta with the help of the EU will build a 150 km gas pipeline to end up on the FSU.
I hope this is some sort of misreporting, because the FSU should be holding liquified gas LNG which will be re-gasified on shore to be used by the power station generators.
The pipeline would be supplying gas which does not need any re-gassification.So why should it be connected offshore to the FSU instead of being connected directly to the power station on “terra ferma”?EneMalta doesn’t need middlemen (FSU’s) to purchase its natural gas needs from pipelines which it will be part financing.
This is not in the best interest of our country.
How low can we go?
I think the Opposition should speak out that it is not agreeing with this dirty business “deal”. This seems to be the work of some World Bank blacklisted middleman.
I love it here – a spiv’s paradise.
Promised 25% reduction, already down to 20%.
Promised fixed price for 10 years, read half that.
Promised construction finish in two years, read that as three.
Bazwar l’hawn bazwar l’hemm, mhux xorta?
Rabat il-futur tal-pajjiz ma’ mhatra.
`…. a trio of Maltese business…`
Fenech`s Tumas and Gasan – the third is CP Holdings (Apap Bologna) which everyone overlooks.
The statement is referring to participants in the winning consortium thus excluding Enemalta.
Who or what is the third Maltese business participant in the winning consortium?
Excuse me but I missed the part where this gas plan passed all the required planning consents, environmental assessments, safety requirements, etc.
Did I miss something?
Yes, Konrad’s vox pops.
.