It gets worse: straight from the horse’s mouth of those who are selling it to us – “LNG is not a long-term solution”
This is part of an interview with Gasol’s chief operating officer, Alan Buxton, from the Gasol website itself. Gasol forms parts of the consortium which has ‘won’ the tender for a new power station for Malta.
Buxton says that LNG (which has been sold to the Maltese electorate as the cheapest long-term solution and the justification for a new power station) is not a long-term solution at all, because it is more expensive than pipeline gas.
In other words, LNG solutions are for situations where there is no possibility of pipeline gas. Nothing has as yet been spent on any pipeline gas infrastructure for Malta.
The Nationalist government believed that the future is electricity interconnectors (on the infrastructure for which there has been considerable expenditure already) and pipeline gas. It persuaded the EU to adopt a policy to connect all member states to the EU networks for electricity and gas.
The EU has just voted some €5.5 billion of special (that is, additional) funds for new network connections and has approved as being eligible for partial funding a new gas pipeline for Malta. This means up to 50% of the costs. After that level of effort and planning, and years of hard work to get the proper long-term solution for Malta and with EU funding for much of it, we are having this self-described short-term measure dumped on us long term.
Why? Because somebody needed money to get into government and others obviously felt they need to make more because they don’t have enough already, and there isn’t a button on the calculator to factor in ‘screwing the country over’, especially those whose country Malta isn’t.
Here’s Buxton, in his own words.
Is LNG a long term solution?
“In a word, no. Although it may be cheaper to run power plants on regasified LNG than liquid fuels, LNG is still more expensive than pipeline gas. But because we will not be able to supply natural gas from our own reserves until 2017 at the earliest, LNG allows Gasol to work with governments in West Africa that are short of gas to develop the gas market. Gasol envisages that having established these opportunities, it will be possible to migrate the fuel supply to pipeline delivered natural gas once it becomes available. Within the Company, we say that LNG is a “bridge” to the long-term solution which is natural gas from the Gulf of Guinea.”
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http://www.gasolplc.com/media-centre/qa.aspx
“In a word, no.”
My kind of man. Trying to get a straight answer from a Maltese professional is like reading through the Talmud on a foggy day.
Alan Buxton, Chief Operating Officer, GASOL `Within the Company, we say that LNG is a “bridge” to the long-term solution which is natural gas ….”
Welcome to Malta Mr Buxton
Yes, but the pipeline is a PN pipeline, the LNG solution is a PL idea.
You see, I’m getting the hang of it now.
The biggest mystery for me is allocating a colour to a person or entity. But it does get easier now the shite are in charge.
“Yes, but the pipeline is a PN pipeline, the LNG solution is a PL idea.”
And that, my friend, is the major difference between the two parties as they have shown themselves in government: one sought long-term – sometimes unpopular – measures, the other short-term vote-grabbing measures. No need to guess which of these will blow up in their (and our) faces.
That’s it.
Now carry that back to 2003. PN was for membership of the EU. Labour wanted ‘Partnership’.
Go back to 1996. PN introduced VAT, Labour said no, not good, and introduced CET.
Don’t ask. To date, no one knows what those were.
You are only being celis, because the PL is building an LNG storage terminal 12 miles offshore, with a regas plant onshore, without any idea how the LNG will travel as a liquid between the storage and the regas plant.
The PN is being nekatif because they want a pipeline, which they said was in the pipeline.
EU paid (85% to be precise) pipeline = no commissions.
LNG, Regas plant, Power Station contract = mucho, mucho pesos in commissions to local Labour Agents and a healthy cut to the Labour Party, no doubt!
LNG carriers come into their own when pipelines are not deemed possible or commercially viable, say, crossing the Atlantic.
The carriers and the distances covered by these actually account for most of the cost involved in using natural gas.
Not so with the Mediterranean, where distances are within reach of feasible solutions.
Which is why the PN was looking at an offshore terminal linked to Sicily. It was in line with European strategy providing a drop off point at the southernmost tip, taking advantage of Italy’s comprehensive gas network.
What has to be said is that Italy exploited its methane resources since the early sixties, they’re not newcomers to the technology.
Following the introduction of the largest offshore storage and regasifying facility outside Rovigo, they’re now exploring pipelines leaving the tips of Algeria and Tunis up to Sardinia, (where most of Italy’s aluminium lies and energy prices are crucial) and on to Livorno on the Tuscan coast.
Fact is, LNG carriers are an accessory to pipelines.
When Mizzi and Muscat speak, all they churn out is spam, delusional and contrary to any criteria to make this thing work. Obviously, they know something we don’t.
“Which is why the PN was looking at an offshore terminal linked to Sicily.”
Why would you need an offshore terminal for the pipeline?
As far as I am aware the original plan called for a Malta-Sicily pipeline for natural gas where the receiving terminal would be onshore because you do not send natural gas in a liquid state through a pipeline, but in a gaseous state.
An offshore terminal would be used for LNG where a floating terminal (FSU) would store the liquid gas and then regasify (on the FSU) it to be sent onshore via a pipeline to the receiving station. Again, you would not send the gas in a liquid state through the pipeline.
The ElectroGas proposal calls for an FSU to be docked right by the power station with the regasification plant onshore. Makes sense as the distance from ship to plant is negligible.
But, in the TOM link below, it says that the Malta-Sicily pipeline will run from Sicily to an FSU twelve miles offshore where (I assume) it will continue on its journey to Malta in another pipeline. Why? What is the point of having the FSU taking into account whats been explained above.
Unless ElectroGas intend for their FSU to be offshore and for the natural gas pipeline to be connected to it at a later date so that there is an option to use LNG as well as natural gas from Europe. But then you would need the regasification plant on the FSU, so why would they be building a regasification plant onshore as planned?
If the gas pipeline is to be connected to a potential ElectroGas FSU 12 miles offshore, then they will have the scope to control the complete supply of gas to Malta whether as natural gas or LNG. Alan Buxton has said that LNG is a not a long-term solution, so is this their plan for Malta?
http://www.timesofmalta.com/articles/view/20131014/local/sicily-malta-gas-pipeline-included-in-eu-projects-funding-list.490328#.UnEBFvnkubg
It was a development of the pipeline, storage and regasifier facility to the southeast, most probably Hurd’s bank.
We don’t need an offshore storage/regasifier per se, EU common strategy does.
Basically the idea was to use the pipeline initially as supply, until this terminal would have been integrated into the grid, using the same line, but flow reversed up to Sicily.
Bypass practically onshore alongside Marsaxlokk.
The PN had mentioned this idea a number of times prior to the election, but the damage had already been done.
The problem was that the number of players involved didn’t allow for any triumphalistic announcements.
How Labour plan to separate liquified storage and the regasifier is beyond me.
I suspect they’re going for the regasifier/storage combo, even because, given that this is waht makes sense, every proposal carries this configuration.
They failed the volumes, 65,000 cubic meters became 180,000. As if industry was giving them anything less.
They failed basic design, rest assured that triple capacity rendered Konrad’s pretty pictures a fairy tale. It simply wouldn’t have fit.
Now they’re stuck with an offshore ‘storage’ facility and a landbased regasifier, doesn’t make sense and will have to give in to the tested storage/regasifier combo.
They obviously know that as soon as they’ll announce this, the PN will claim that as their proposal in the first place.
Sometimes I dread to think they’ll do anything to avoid it, just to prove some point.
No wonder deadline slipped by a year.
Jozef probably meant that the ‘offshore station’ is where the node is formed where the Malta section of the pipeline meets the main trunk originating in Libya and terminating in Sicily.
Joining such a pipeline is not a matter of welding a ‘T’ like one would tapping a domestic water line to branch out service to another room.
The EU plans date back to September 2006 and the Malta ‘leg’ was already mentioned and deemed feasible.
It is wrong to assume that the Malta pipeline would have been a direct Malta-Sicily connection.
Further proof of the time for ‘due diligence’, background checks and research Labour invests in when handling matters of national strategic importance.
The people were told that this investment is in a power station that we don’t need. I don’t know how the PN could have emphasised more as it was being explained and repeated almost daily in the days and weeks leading to the election. However the majority made from a good mix of chicken brained and egoistic opportunistic bunch chose not to listen. Iss’ aqla ja Malti.
We definitely don’t need a regasifier if the plan is to go for the pipeline.
We definitely don’t need a tanker holding liquified gas 12 miles offshore with a regasifier on land. It’s like having your car in the garage and a set of tyres on the roof, you’re not going anywhere.
We can’t have conversion to gas unless these minor details are ironed out. Given the goobledygook we’re being fed, can’t see it happening.
Just pray they’ve realised the only solution is the one conceived by the previous administration, and they’re too bashful to admit it.
We may be missing some important points.
According to statements made public, the Floating Storage Unit and the regas unit will be supplied by SOCAR Trading SA.
And so will the gas.
This is why I now believe that the control over the Electrogas Consortium is held by Azerbaijan, not China. Which is also why I think that Gasol’s institutional investors are some Azeri benefactors. Gasol entered into a strategic partnership with STSA in December 2012 whereby the latter will provide the former with LNG gas and FSU/FSRUs for use in Benin, West Africa.
Last month, a ship-building yard was commissioned in Baku. SOCAR has a majority shareholding in the yard. In theory at least, they can now build their own LNG carriers and floating storage facilities.
If SOCAR will be involved in building a gas pipeline to the South of Italy, as someone suggested on this website, they can easily replace any FSU with their own pipeline.
Having said that, we knew it from DNV Kema that the pipeline remains the cheapest solution. Tonio Fenech lost his voice saying so during the electoral campaign.
Bashful? These guys know no shame. The more appropriate term is mule-stubborn.
Along with this reasoning, to also keep in mind the study for a Libya-Malta pipeline proposal that was not taken up 10 years ago. The study was carried out over a number of years by a major private player in Malta.
Whilst political matters in Libya are currently highly in turmoil again, I have no doubt that the intention here is to secure the additional part of the puzzle, explaining Muscat’s arse-licking approach to Libya, whoever holds the reigns.
Having excellent neighbourly relations is one thing, the arse-licking approach another.
Nonetheless, whilst the local power source question raised before the elections is extremely important, I do not believe that this is the crux of the issue. This was necessary to sway public opinion. The Maltese electorate majority as evidenced would never have become emotionally attached to foreign pipeline plans, but only to a promise of a local bill reduction.
Muscat’s distasteful and illogical arrogance on all issues towards the EU would be pointing, in my opinion, to a situation where he is a player able to dictate – even as player in a consortium or alliance – an energy price to the EU.
And why Malta? Perhaps because through Muscat heading an EU State, “the strategic importance” for the envoy and alliances, is that of door-opener and path-layer to much wider plans with broader potential gains than merely national. This would strike a chord.
The Opposition is no where on this power station debacle.
There is really no need of this LNG facility especially when we have it in writing that the EU will assist us financially on the gas pipeline. The LNG facility and the pipeline are simply not compatible with each other.
The Opposition have been very clear on this prior to the election, and the chicken brained majority did not take any notice.
Now they have taken Christ’s recommendation: They went outside the town, shook the dust from their feet and have left those switchers to their fate.
The only problem is that those that we true colours of the PL(MLP), shall now be suffering with the rest.
Two years ago, Anglu Farrugia told Bondi+ that Labour’s solution to reducing electricity tariffs was John Dalli’s plan (“Il-pjan ta’ John Dalli”).
At the time, in the absence of other information, we concluded that he was referring to Sargas.
But now, equipped with hindsight, can we be sure that Farrugia’s reference to “John Dalli’s plan” was not a reference to another proposal, other than Sargas?
So after the lovely deal with Libya, are we moving to that other haven of stability, the Gulf of Guinea?
So PN put us on par with EU countries, whereas labour so far has put us on par with West African nations when it comes to energy and Caribbean Islands when it comes to citizenship. What next?
What next? On a par with China on human rights I suppose.
@ Banana republic … Again
Next will be, actually it has started already, Azerbaijan and China style of dealing with human rights and freedom of expression.
Well done, switchers. Hope you all get the iced buns you voted for and choke on them on your way to hell.
There are many things which were not said about BWSC and this new one in public. I am waiting to hear them in public three years later!! This new power station comes from reports done before the BWSC one. So we’ll see what happens in future on this one.
NO SURPRISE AT ALL. THE MALTA LNG OPERATED POWER STATION IS BEING HAILED AND HALLOWED BY THE ONE AND ONLY PERSON WHOSE MAJOR PROJECT OF A LIFETIME WAS THE PLANNING AND CONSTRUCTION OF ROUNDABOUTS.
Very complex engineering there. All that drip irrigation.
All those curly bits…. you know… to make a big circle.
Thank god for Computer Aided Design software.
Roundabouts, perfect.
Well, a drip irrigation systems is a system of pipes. Isn’t a gas pipeline a system of pipes?
And the water to the roundabouts was supplied from a mobile vessel.
Don’t worry. It’s all “on track” and “doable.”
I had actually commented on the fact highlighted here on 17 October, on this website, here:
http://daphnecaruanagalizia.com/2013/10/unmitigated-arrogance-breeds-carelessness-and-indifference-and-that-means-you-leave-spoor-which-others-can-follow/
In one of my longest ever comments on this website, I had noted that:
“I have to add an important point. In the same place on Gasol’s website as referred above, Gasol says that: “Gasol has been working to develop an interim gas supply solution through the provision of regasified LNG. The Company aims to sign gas sales agreements for regasified LNG to develop a gas market prior to substituting natural gas for LNG.”
This shows that Gasol itself considers its FSRU technology as an “interim solution.” In fact, based on information published by and about Gasol, the company is at the moment seeking to import LNG to Benin where it will regasify it and feed it into the West Africa Gas Pipeline (which connects Ghana, Togo, Benin and Nigeria) using LNG FSRUs as a temporary solution, until it can acquire and connect to regional gas sources.
This means that the MLP is buying for Malta, for a period of 18 years, what Gasol, the supplier, sees as an “interim solution” in its main target markets. WOW, way to go.
While Gasol is seeking to connect and feed gas to African countries – Ghana, Benin, Togo and Nigeria – through a gas pipeline, Joseph Muscat and Konrad Mizzi went to Gasol (and others) to feed Malta, “the Best Country in Europe,” with an “interim” solution” which costs Euro 370 million while the European gas pipeline solution is put on the back-burner. ”
The link to Gasol’s website was this one:
http://www.gasolplc.com/our-operations/supply-gas-and-lng.aspx
Yes let’s cripple the country and invest in something we do not need just so to make Gasan and Fenech and a few Azeri ‘crooks’ richer than they already are. Another promise Muscat made which he was in a rush to push through.
People change little over generations.
In Tumas Fenech read Lino Spiteri, Charles Mangion and John Dalli.
Of course Dalli is instrumental to Muscat’s plans. The hospital position is dust in our eyes. A deflector.
I don’t exactly know why, but reading your article made wonder about the Fenechs.
It is very unusual of Labour to bash a business that the Fenechs are in. For some reason, they appear to be immune to political controversy. A case in point is Portomaso. While all hell broke loose among the environmentalists, the MLP opposition, as it was back then, did not join the outcry against the PN as it usually does.
However, the same did not happen in the case of Arriva. The LP saw it as an extremely good opportunity to bash the PN government, especially since Franco was also bashing Austin on the same issue. They could not lose this opportunity whatever what, even though the Fenechs held some 40% of Arriva Malta.
But the non anticipated occurred. It is very unusual of the Fenechs to pull out of a business they’ve just invested millions in it, something which they did in the months preceding the election.
Could it be that now is payback time? After all this investment appears to guarantee a much better prospect than the public transport one.
I look forward to such a debate in parliament before it is too late.
http://www.maltatoday.com.mt/en/newsdetails/news/national/New-supermarket-proposed-in-outside-development-zone-in-Zejtun-20131031
There is something truly unusual.
The websites of Siemens and SOCAR Trading SA (and SOCAR) do not show any news about their win in Malta, which was announced publicly on Sunday 13 October by Konrad Mizzi.
To be fair, in the case of SOCAR, I searched even their ‘news’ dated before 13 October 2013. I thought that if the Azeris are able to announce the results of general elections in their country before the elections are held, then they should be able to announce the results of tiny Malta’s public procurement process for a gas power plant. This time, this was not the case. So may be if the general elections were fair, as declared by Dr. Anglu Farrugia, then perhaps it is Malta’s public bidding process that was not fair.
But let’s not deviate into ‘insignificant matters.’
On the other hand, Gasol plc has featured its win in Malta very prominently.
It is understandable that the contractual capex amounts involved are perhaps relatively large for Gasol but relatively small for Siemens and SOCAR.
However, the strategic relevance of working with a monopolistic operator in an EU country with a strategic location for LNG transportation should be news.
Also, assisting a country to transform its energy source from oil to gas should also be news worthy.
And based on what the Prime Minister of Malta has said, working with a corporation in which the Chinese have made a strategic ‘investment’ that could turn the country (which so far never extracted one drop of oil from its territory) into an exporter of energy is of news value.
It is also not said that in the case of SOCAR, an 18-year contract for the monopolistic supply of gas to the entire power station complex on Malta, without any price regulatory clauses after year 5, would not be quite substantial in value and relevance.
I thought that this omission by Siemens and SOCAR was rather – to quote the Clowns in Castille – “surreal.”
This sad story is all about money, other people’s money, that is.
The PL, pressured by their last chance to beat the PN at an election (the previous real and true election win was in 1996) gave all, promised everything to everyone, threw caution to the wind and following the demonisation of the versatile, efficient and CLEAN BWSC engines that could run on either HFO, diesel or gas, came out with their version of physics and chemistry and promised us lower priced tariffs by burning higher-priced fuels.
The cheapest fuel is coal but coal is a no-no in Malta, the the next cheapest id HFO then LPG then CNG then LNG.
LNG is the most expensive fuel because it is the cleanest and the price is increasing year on year with inter-annual variability due to winter demands in the northern hemisphere, where most people live.
So I just cannot see how Joseph Muscat and his sidekick can manage to produce snake oil, I mean cheaper electricity by burning costlier fuel when Enemalta is already losing money when selling electricity at 16 cents a unit. For the snake oil salesmen to keep their promise the basic rate cannot be more than 12 cents per kWh (unit of electricity) when it is known that this rate does not exist anywhere in Europe. The cheapest electricity at the moment is found in France which sells nuclear-powered electricity at 15 cents.
So, Malta would have diversified its electrical power budget into two- sources; baseload produced locally by the BWSC machines powered by petroleum gas served through the EU-funded pipeline, and the EU-funded interconnector. Thus, we would have removed all stocks of environmentally hazardous fuels from our tiny little island.
But will the snake oil salesmen manage to sell electricity at 12 cents a unit? Of course they will. The plan is to play with accounting, reducing the cost of electricity superficially while taxing us indirectly as our finance minister has already promised.
How?
The plan which is now in place was to fill all strategic boards and positions such as chairpersons, CEOs and the chief of police with party men in the hope that the party would be able to control everything, from the national accounts to who becomes a Maltese passport holder to what’s shown on TVM.
But the edifice is already cracking. Each day, like the sun rises up every morning we have a new gaffe and worse than that, each gaffe is worse than the previous. But the party men do not bother since their real plan is to make money and the best way to make a quick buck is to make it through the biggest purchases Malta has ever seen.
Besides the sale of citizenship, which is actually a graft machine, the other one is the purchase of 2 billion euros of LNG in ten years. 4 billion for the 18 years of the contracted period. This is the best place to have a finger in. We never had, in Malta a purchase that big. NEVER. I appeal to everyone to see through the charade of the cheap electricity promise which is not cheap. It is expensive. No one is going to sell us cheap energy for 18 years. This is another false promise from the snake oil salesmen.
One must also consider that all electricity in Malta will be powered by the LNG supplied by the Fenech-Gasan oligarchy. Both the BWSC and their promised-built-in-one-year power plant will be running on their LNG. Malta would be in their hands and the profiteers will not bother if they lose the next election since a purchase of 4 billion euros renders enough for retirement.
Pipeline gas is cheaper than LNG because it is simply compressed gas. LNG is also compressed gas, but at much higher pressure and in cryogenic conditions which are expensive to maintain.
Obviously liquefaction of methane gas to produce LNG is more expensive relative to pipeline gas.
I believe both options are feasible for Malta. Pipeline gas (Plan A) is cheap. However, pipeline gas from Sicily ultimately comes from Libya, which is an unstable country and likely to turn off the Greestream pipeline, as indeed happened during the Libyan civil war.
In that case, transport facility for LNG by ship and regasification plant would be the only option (Plan B).