This is my proposal for a re-think of the selection of one of three options to supply natural gas to the newly proposed200 MW power plant at Delimara. First of all, accelerate and concentrate on the 200 MW Interconnector and purchase relatively cheap natural gas power from the spot market, in particular from Holland where substantial excess supply exists. This will ease the pressure on the new Delimara plant programme and at the same time close down the old and uneconomical Marsa plant.
As a second step, enter into serious negotiations with some party, like ENI, for a long term natural gas supply for the new 200MW Delimara Power Station on the basis of a gas pipeline to be laid, owned and operated by ENI.
For comparison purposes, the client should conduct fully fledged complete EIAs for the new 200MW, LNG-fired power plant, taking ALL relevant aspects on board including those related to other Port operators, navigational aspects, possible capital dredging works for the approach channel, turning bay and possibly for the berthing area, and above all, those related to the nearby townships, before a definitive plant and supply system design – of which many examples exist all over the world – could be proposed.
Approvals, modifications and final approved design followed by long lead items such as design and procurement, construction , installation and all inclusive final plant commissioning would take well over two years or longer.
If realistic, unavoidable commitments have been made for the purchase of this FSU and this FSU could not be sold as is, one should commence immediately with the design and construction of a FSU based regasification plant on the bows of this vessel as was done with the Toscana, which is now in operation and moored on a single buoy 34 km offshore of Livorno, Tuscany.
Sell the now created FSRU and conclude a lease-back deal for a few years until the ENI pipeline is commissioned and takes over the supply of CNG. There are many examples of this happening.
Multiple arguments against the FSU option have already been presented and debated and it appears that the FSRU solution, of which there are a number of examples around the world in operation, prevails.
An international conference on FSRUs in different locations worldwide was held in Dubai last month, which gave a comprehensive review on design, construction and operations. The conference papers show 11 active FSRUs and 40 units on order in Indonesia, India, Kuwait, Lebanon and other countries.
From an economical point of view, the following cost/benefit analyses should be made and studied in depth.
The FSRU together with the SBM (single buoy mooring) solution are mobile assets which can be purchased, sold, rented or leased in a very rapidly growing global FSRU market. The FSRU is therefore a very cost effective temporary solution for the supply of gas to the 200 MW plant until a permanent gas supply through a pipeline connection with Sicily has been commissioned. Whatever solution, FSU or FSRU, is selected, the actual financial and operational costs will affect the total cost of the 200 MW output substantially as a 200 MW plant is a relatively small power station.
In the long term, the lifetime of an CNG (compressed natural gas) fired plant is well in excess of 20 years – current contracts for up to 30 years – the permanent pipeline will be the most economical solution due to its very low operational and maintenance costs coupled with very low environmental impact, low risk as well as a high degree of safety. For example, Italy imports its gas by pipeline from North Africa and not by ship.
If the pipeline import option is selected in the long term, the existing option for a FSU with bridge connected regasification plant onshore, complete with permanent new wharf platform with mooring dolphins and additional breakwater as required, including their associated exorbitant insurance premiums, will be cancelled as these structures will become obsolete , resulting in a big financial loss. In that case, the option for a temporary offshore FSRU should be selected, unless the commissioning of the power plant will be synchronised with the commissioning of the pipeline, which, in my opinion, is the best solution all around.
In early 2013, it had already been reported in the press that an ENI study had concluded that of all options to supply LNG / CNG for the new 200 MW power, the 153 km long CNG pipeline from Gela (Sicily) to Delimara at a cost of €200 million -+ and buildable in 18 months, following study and permits, was by far the best option.
Kees de Jong
Mt de Jong has more than 35 years experience in the international market of transport civil engineering construction projects, including the ultimate responsibility for the construction of the first LNG Export Terminal in Bontang E-Kalimantan, Indonesia and similar marine terminal projects thereafter between 1985 and 1994