Loved up with dictators update: SOCAR of Azerbaijan is staying
Ilham Aliyev, the Kleptocrat of Azerbaijan
From The Malta Independent’s interview with Konrad Mizzi:
The Minister explained that the projects being carried out by ElectroGas and SEP are intertwined because the former have to be advised on the completion date of the latter’s project so as to synchronise its gas shipments.
This paper also asked the Minister to clarify an announcement he made on Monday, when he said that Shell will be providing the fuel (LNG) for the new power station and the converted BWSC plant, raising questions about SOCAR’s future in the ElectroGas consortium.
In his reply Dr Mizzi said SOCAR will be, among other things responsible for trading and hedging gas and coordinating gas shipments but it will buy the fuel from Shell. “The LNG will not be shipped from Azerbaijan.” In reply to questions sent by this paper today, SOCAR also insisted that it will remain part of the consortium.
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http://www.independent.com.mt/articles/2014-10-21/local-news/New-power-station-deadline-to-be-given-end-November-Energy-Minister-Konrad-Mizzi-6736124152
Read carefully: There won’t be any need to literally “ship” from Azerbaijan, if the Azeri pipeline, through Turkey and into the Mediterranean, ends up at “South of Italy” in less than 4 years time.
Labour always plays with words: A little daily lie here and there?
So Aliyev stays in the loop to take the commission from gas bought from Shell . He will buy and sell the gas and make the most profit for himself.
Konrat should be investigated for corruption because he is signing secret deals behind parliament’s back.
Include Manwel too, for drawing them up.
The minister’s statement complicates matters. SOCAR is a gas producer and supplier in its own right, why are they going to buy gas from Shell?
At any rate. SOCAR is obliged to provide fuel to Electrogas; where they get it from is up to them. If they want to buy it from Shell that’s their business: a transaction between two companies. I don’t see why Shell has to be mentioned by the minister as if it is part of the consortium.
I disagree with your second paragraph, Antoine.
Why isn’t Enemalta buying the gas from Shell directly?
What is the purpose of putting a middleman between Shell and Enemalta?
Why does a company of the calibre of Shell need a middleman to sell to Enemalta?
What is the purpose of having Socar/Socar Trading, an Azerbaijan company, as the middleman?
Why incur a cost on Socar/Socar Trading’s services when Shell, with its size, determines global prices?
Socar will not be trading if it buys only from Shell. It will merely be acting as an agent of Shell.
Shell is ranked the second largest oil company in the world – it is second only to Exxon Mobil by turnover. Joseph Muscat should show it the same respect that he shows the “world’s second largest economy.”
The government has to explain.
Referring to my first few questions, this is why tenders normally require the names of bidders to be clearly stated and clear declarations on the involvement of subcontractors and their details.
Did Electrogas state in its bid that it will be acquiring gas from Shell through “trading and hedging” deals carried out by Socar Trading?
The Minister is playing with the words “trading and hedging” because he probably thinks he will mislead the public by confusing Socar Trading’s name with the Maltese obsession with hedging the price of oil and gas.
Trading and hedging mean commissions and charges…
Ciccio, the power stations that will be using gas are the Electrogas one, when it is built, and the BWSC, to be owned by the Chinese. Enemalta will have only a small plant kept on stand-by.
This means that Enemalta doesn’t need gas and will not be buying, except small quantities. All Enemalta is buying is electricity.
Neither the Chinese nor the Electrogas consortium would buy gas from Enemalta when they can buy it directly from producers or extract it themselves.
I am not very sure about this, Antoine. The request for proposals for the Power Purchase and Gas Supply Agreements contract was issued by Enemalta. The contract will be signed by Enemalta as the buyer.
I had questioned here before why the gas purchases are being handled by Enemalta when one considers that now even the BWSC plant has been sold.
But Enemalta can buy the gas, use it in the power generation at BWSC or Electrogas, and then settle with the separate owoners of those plants on a net basis – a settlement in which the gas supply is netted from the value of electricity purchased.
This way, Enemalta will be able to buy all the gas in large quantities and will have control over the price of gas. Besides, the burden of the long term commitment to purchase gas will be kept by Enemalta rather than passed on to the private operators. I think there is nothing wrong in this.
Muscrap and Konrat don’t actually know the repercussions that will be thrown on Malta through this deal. they have no foresight. It’s all about money, votes and populism.
Way to go: our energy supply will be manned by two countries both governed by dictators.
The deal with Shell needs an investigation by the independent authorities of the country.
Shell was one of the original separate bidders for the project. Did it declare any interest in another bid? It would have been a requirement of the tender process, in order to avoid collusive bidding.
Well, at the time it may not have had any other interest, but we do not know. But now we know that it has.
This means that the winning consortium has changed from the one which won the bid.
At the time they won the bid, did Electrogas declare that they will source their gas from third parties? Apparently not, because Gasol had published a notice soon after they were declared preferred bidders putting in black on white that gas would come from Socar.
In my view, the award of the contract should be stopped at once and the entire process started again. This is against the rules. This smells of corruption.
No, corruption is what Konrat says; that a feed-in-tariff of 22c is corruption when everyone and his brother and the audiror general had known it for years, ever since the government had published, openly, the tender which eventually was, after proper adjudication by technical experts (and not by a minister) awarded to the nominated contractor.
Konrad is at his wits’ end, in panic, clutching at straws. Poor sod.
Why is he finding the feed-in tariff of 22 cents corrupt? Unless I am wrong, isn’t this the rate he is paying to households who have PV panels installed?
The Opposition should ask the Auditor General to investigate the involvement of Shell in the purchase of gas.
Shell was one of the “Big Names” in the iniital expression of interest.
http://www.timesofmalta.com/articles/view/20130511/local/big-names-among-power-station-bidders.469151
But they chose to withdraw their interest by the time of the final bids.
http://www.timesofmalta.com/articles/view/20130921/local/Big-names-pull-out-of-gas-plant.487033
Why did Shell withdraw from the bidding? Were they paving the way to others to win the bid?
“In his reply Dr Mizzi said SOCAR will be, among other things responsible for trading and hedging gas and coordinating gas shipments but it will buy the fuel from Shell.”
Does this mean that we will have to pay commission to SOCAR for acting as our agents and our shippers?
Would it not have been better and may be even cheaper to issue an international tender for such services?
Yes and yes.
X’tahwid!
Is it LNG or LyiNG ?
Liars Now in Government.
If SOCAR will get its gas exclusively from Shell, where does hedging, trading and coordinating shipments come into it?
If the minister had any decency, which he doesn’t, and that’s why we’re stuck with his now daily self-contradicting explanations, he’d realise he doesn’t need this SOCAR outfit.
L-akbar skandlu fix-xiri tal-fuel ghadu gej.
So Gasol is trading and hedging in the power station project design and delivery schedule.
Socar is trading and hedging in gas.
Siemens is trading and hedging the financing of the power plant.
The Maltese members of the consortium are trading and hedging in the engineering part.
Is there anyone doing anything in this consortium that is really adding any value?
No wonder Delimara is still a heap of rubble and the prime minister and Confusius Mizzi are unable to deliver…wait a minute, they too are caught up in trading and hedging …in lies.
I did not hear the parliamentary debate about this power station saga. Are the media totally Labour controlled or was the Opposition totally unprepared in its strategy in exposing all the damned lies about this project?
How could Konrad Mizzi again give the assurance that EneMalta will not be obliged to buy the electricity generated by the BWSC plant owned and gas converted by SEP?
So theoretically the Chinese will spend millions and sit idle on the plant while Malta possibly buys its energy from the interconnector?
Why hasn’t the Opposition insisted on seeing both the ElectroGas and SEP contracts, till they are hoarse and on hunger strike – because energy supply is the backbone of the country .
Pullicino and the solar panels tender seems to have got all the publicity instead.
It’s energy.
And I am pleased that the government will not proceed with the solar panels tender which apparently runs up to €35 million, and this for a number of reasons.
1) Only one company progressed to the final stage of the tender process as others were disqualified. This should never happen where you are left with a single bid, and you are lumped with the price willy nilly.
2) People forget, but this is the same company which was involved in the bus ticketing scandal, which machines never worked.
3) It is well known that the director of the company is of the same ilk as Carol Peralta – and it may very possibly be a reason why the company ended up as the sole bidder.
Ask the competitors of this company. No further comment.
So the oil scandal saga will continue to develop with whoever is in government and will now move on to gas purchasing agreements.
What’s all the secrecy with publishing the contracts?
We have had so many different reasons for the delay on this project that it is very hard not to think that there is an awful lot of back handed deals going on. What does one have to do to get them to make the contracts public.
YES it is in our interest to know what is in them even if the government says it is not.