This time last year, Labour in opposition unveiled their plan on how they would reduce electricity tariffs by 25 percent. The desk top presentation contemplated a scenario where Enemalta would enter into a power purchase agreement with a private entity which would in turn build a new power station fuelled by natural gas.  There is no doubt that the use of natural gas as a source of energy has mushroomed globally principally due to rocketing prices of crude.  There is equally no doubt that the move to gas is a step the right direction.

What did not quite add up however was the explanation we were given related to the storage of the liquid natural gas (LNG) and the fact that labour appeared to ignore completely the possibility of having a gas pipeline between Malta and Sicily.  We were informed then that the project envisaged the building of two, 30,000 cbm tanks on land, next to a regassification plant which would gassify the LNG prior to its combustion by the power station.  

There was something that was not quite right about  this proposal because it meant that the energy suppliers would also need to procure/charter vessels to supply and replenish these tanks which ships would need to be of circa 50,000 cbm capacity and such LNG carriers at circa 50,000 cbm were very difficult to come by. My searches revealed then that there were only four such vessels with that capacity available worldwide.  

My views on this were questioned by those asking why the suppliers could not take a partial delivery from a much larger LNG carrier.  The answer lies in the properties of LNG.  LNG needs to be stored and carried at -161 degrees which means that if the temperature rises by 1 degree it turns into gas and in so doing multiplies in volume by 600.  This means that partial discharge of a tank carrying LNG is not recommended because the sloshing around of the LNG in the tanks during the voyage would increase its temperature and consequently to gassing off – to “boil off”.   Furthermore discharging some tanks and not others would lead to undesirable stresses on the vessel. For these reasons and several others, the partial delivery of LNG from larger LNG carriers is not ideal.
In fact, what is being proposed now is substantially different. The two land based tanks storing  30,000 cbm each have been replaced by a 126,000 cbm floating storage unit (FSU) permanently berthed at the end of a jetty, a relatively few metres away from land, which will need to be refilled regularly (we were informed at the MEPA public hearing  - around 12 times a year) by another LNG carrier of around the same size.
The reality is that having an FSU of 126,000 cbm supplied by another  LNG carrier of roughly equal capacity is not unusual.  What is most unusual and most undesirable is that this operation necessitating such ship to ship transfer of the LNG via cryogenic piping will be  located and taking place within less than a one km radius of a highly inhabited area, of the country's only and highly successful international trans shipment terminal, of the country's only international oil storage facility at Oil Tanking, of the loading point of aviation fuel at the dolphin in the centre of the bay, of the entrance to the harbour, of numerous other installations attracting marine traffic such as San Lucian Oil Company Ltd. and its bunkering operations  and  of  Malta's largest fraternity of fishing vessels.

To put all of this into some sort of perspective,  the activities at Malta Freeport alone which have put Malta on the global trans shipment map,  sees some of the world’s largest container ships now reaching the giga size of 396 metres such as the MV Marco Polo, calling fully loaded on a regular 24/7 basis, which currently translate into 6,000 moves per annum in and out of  Freeport excluding all the other vessels calling in and from all the other installations mentioned above  - circa 3000 -  plus the fishing fleet! So one can only imagine the existing levels of maritime traffic in what is essentially an already exceptionally busy but geographically restricted waterway where masters and pilots already need to exercise tremendous skill in bringing these ships in and out in all sorts of weather conditions and challenging situations all geared towards ensuring the safe passage of the vessels into harbour and to their berth and out of harbour past the breakwater to open sea.  
And now, in order to make their life more exciting, it would appear that they will also have to manoeuvre around  a permanently moored 126,000cbm FSU and its regular supplier of similar size carrying out what is not an un-complex and free from danger ship to ship transfer of LNG.  One does not have to be a rocket scientist to conclude that the risks and chances of a casualty taking place will be greater than if there was no such FSU in the middle of the harbour!

What I find rather mind blowing is how we now see a project entirely dependent on the existence of a 126,000 cbm carrierpositioned in the middle of Masaxlokk together with its supply ship of equal proportions, without a maritime impact assessment having been carried out FIRST and FOREMOST.  That is what we were told at the MEPA public hearing.  We were informed that no such maritime assessment had yet been done however it will be done in due course! How very reassuring! 

I find it equally strange how come, the powers that be do not appear to have considered some very fundamental questions:  To what extent is the navigational safety of this busy and congested water way being compromised? What is the increase of the likelihood of a casualty in the middle of Marsaxlokk harbour? What effect is such a casualty likely to have on the immediate population? What effect is such a casualty likely to have on the average fisherman? What effect is such a casualty likely to have on the operations at Malta Freeport? What effect is such a casualty likely to have on the fishing industry in Marsaxlokk? What effect is such a casualty likely to have on the activities at Oil Tanking?  What effect is such a casualty likely to have on bunkering activities?  What effect is such a casualty likely to have on the operations at Marsaxlokk Harbour?  What effect is such a casualty likely to have on the very power station it is intended to supply fuel for? The list is endless. Surely it would be reassuring to have some answers.

In the meantime, there is a very simple and logical solution, the one being demanded by the representatives of the population of Birzebbugia and Marsaxlokk.  Take the FSU outside the harbour.  This can be done.  Either the FSU is taken off shore with the liquid natural gas being transferred to the regassification unit on shore via underwater cryogenic piping (a possible but highly unlikely scenario)  or, have a floating storage regassification unit off shore where the LNG is actually turned into gas on the same ship then piped as gas directly to the new power station (perfectly feasible and frequently used method).  

The problem here appears to be cost since this would obviously be more costly than the FSU lying at the end of a jetty in the middle of Marsaxlokk harbour.  However, the additional cost should not be of concern to Enemalta.  After all Enemalta, we are informed will be entering into a power purchase agreement with the investors and it is up to the investors to invest in the " hardware".  The problem however, one assumes lies in the fact that when the maths and financials were indeed being worked out by the investors, the costs associated with the safer option of having the floating storage unit, or the floating storage regassification unit off shore were much higher and because they were higher, the resultant energy could never be sold to Enemalta enabling a  25% reduction in price as promised by labour. 

Thus the safer but clearly more costly option would not have enabled the reduction in price! It seems to me therefore that government, in return for a reduced energy price accepted the bidder’s clearly cheaper solution.  So the bottom line seems to be that the very possibility of  a reduced  price of electricity  will come at the increased risk to the population of Birzebbugia and Marsaxlokk, at the risk of losing the entire country’s power supply if things go horribly wrong, and at the risk of closing down our most important harbour in the event of a maritime casualty.  

I’m not quite sure this makes any sense at all.

Ann Fenech is the Managing Partner of Fenech and Fenech Advocates, and the Head of the Marine Litigation Department. After qualifying in 1986 she joined the shipping and commercial firm of Holman Fenwick and Willan in London where she stayed until 1991 prior to joining New Orleans firm of Chaffe, McCall, Phillips Toler and Sarpy. She is the President of the Malta Maritime Law Association and Vice-Chairman of the Yachting Services Trade Section at the Malta Chamber of Commerce and Enterprise. She is the president of the PN executive council.