The Delimara LNG power station project could be delayed by six to 12 months, according to a report by a maritime news agency.
Trade Winds News reported a few weeks ago that that the project’s “start-up schedule appears to have slipped back from September 2015 to March 2016.”
The dates indicated by Trade Winds imply that the project would be delayed by six months, but the government has repeatedly stated that the new power station project would become fully-operational by March 2015, which would mean that the delay will be by a full year.
The PL had promised to build a new gas-fired power station within two years of being elected to power and the project developers – Electrogas Malta Ltd – are insisting that the March 2015 deadline can be met.
Electrogas – which is formed by Gasol, Socar Trading, Siemens Projects Ventures and Maltese company GEM holdings – won the tender to construct and operate a new gas-fired plant, a Floating Storage Unit, an onshore re-gasification unit and also to convert the BWCS plant to run on gas.
Some months back the European Commission had raised doubts over the power station project since no visible works were being carried out at the Delimara site. Besides, the contract with Electrogas was only signed in May of this year. Energy Minister Konrad Mizzi however insisted that the project is on track and revealed last week that drilling works had started.
Speaking to sections of the media in June, Michael Kunz from Gasol, said works to determine how the foundations would be built had been completed and engineers were expected to visit the site next week. “The project is on track and the deadline set by the government will be met,” he insisted.
The deadline set by the government means that all components of the power station, including a jetty for the Floating Storage Unit, have to be built within an eight-month timeframe, which has been described as very ambitious, if not unreachable.
A delay to the government’s plans could also spell trouble for Prime Minister Joseph Muscat, who has promised to reduce energy tariffs for industry by March 2015. The government managed to lower energy tariffs for households this year by selling off an Enemalta holding company for €30 million. But plans to reduce tariffs for factories and companies depend on the new power station’s completion by the set deadline. It is not clear how the government will act should the deadline not be met.
Conflicting reports on project completion
There are conflicting reports on the project completion targets. MEPA gave its green light back in March of this year and, according to the Enemalta project brief, the “total construction time for the Combined Cycle Gas Terminal and the LNG Plant is not expected to exceed 18 months.” If the project takes eighteen months from after MEPA’s approval it would be completed by September 2015, and not March. The brief, however, also states that “the target date for both facilities to be fully commissioned and put into commercial operation is April 2015.”
In an interview with the International Oil Daily back in October, Gasol Chief Operating Officer Alex Buxton had claimed that the first LNG shipment would arrive in Malta by September of next year. “We hope to have the project particulars finalized by March 2014. 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.”
Trade Winds also reported that an LNG carried has been selected to serve as the FSU for the Gasol-led import project being developed for Malta. “Details of the vessel chosen have yet to emerge but a spokesman for one of the project shareholders confirms one has been secured. An official for project partner Socar Trading, which has been handling the search for and chartering of an LNG carrier, did not respond to a request for comment.”