Amid the welter of reports, statements and re-writing of the history of gas, a few useful facts seem to have emerged.

The offer by ENI of a pipeline had some interesting features. The capital cost was to be borne by ENI, but this was to be recovered over 25 years from the sale of a fixed quantity of gas governed by some price-fixing mechanism. Enemalta was reluctant to play. The price of gas was too high; utility rates would not have gone down, said Dr Gonzi a few days --- not exactly surprising, given the rock-bottom levels tariffs were at in 2003, and their total detachment from real generation costs.

We are also told that we would have had to pay for gas we had not used. That may sound odd, but it is probably a reference to a “minimum usage” condition, stipulating the smallest amount of gas that could be purchased. Clearly, the size of our demand was below the ENI figure, a state resulting in having to pay for gas we were not using. And we also had to pay to convert the whole of the Delimara power station (DPS) to gas.

We are now keen to go for gas. So what’s new, pussycat? We still have to convert DPS, but now with a new element: the HFO-burning BWSC plant. Starting at €27 million, the BWSC plant conversion price has now reached €60 million. That apart, we are asking for EU help with pipeline capital expense, regarding which, Dr Gonzi has just said “it seems (sic) to have been granted”, though amount and time (post-2014 budget in any case) are unknown. Incidentally, the EU aid timeline is the factor pushing pipeline timescales into the five to seven-year bracket.

That leaves the real bone of contention: the gas supply. In 2003, our demand was clearly below the ENI minimum usage level. In that year (with a famously hot summer in which Enemalta faced the highest power demand ever: 430MW) Enemalta generated 2300GWh of energy. In 2010 and 2011, because of recession and other minor factors, Enemalta sent out less than 2200GWh. So our present gas demand would be about the same as in 2003 (probably less because of more efficient machinery). With projected rates of growth of demand of two per cent (beginning to look too high) our demand for gas may not move much above the 2003 level in the medium term. So we may be faced with the same problem in drawing up a gas supply contract. Incidentally, this Minimum Usage Condition may make the PL intention to obtain only 20 per cent of demand from the Sicily IC unworkable.

One of the criticisms levelled at the PL LNG-plan – this would “resolve” the low demand conundrum by adjusting the tanker frequency – is that there are few small capacity LNG tankers around. Apart from the known flexibility of LNG tankers in having multi-terminal destinations, there are even fewer (zero actually) low-capacity pipelines around, unless we have one made especially for us of course.

So a desire for gas from pipeline, thwarted in 2003, not taken up again in 2006-2008 as by then it would have been too late to beat the looming EU Marsa death sentence, may still meet the 2003 pipeline obstacles in 201X. Our problem is that LNG has no means been brought in from the cold yet, in the minds of a good section of the population at least. Still, the LNG option deserves a better level of critical comment than it received from Alan Deidun, who demanded that “an onerous Appropriate Assessment (AA) study” be made to determine the effects of “ the surplus volume of hot seawater that will be generated at the new Delimara plant through the re-gassification of LNG…”, without bothering to check that re-gasification will, in fact, produce cold water that could then be used to cool turbines.

E.A. Mallia

ATTARD