The Malta Independent 16 May 2022, Monday

Gas pipeline: Claim of €100m payout to Electrogas ‘factually incorrect’ – Miriam Dalli

Thursday, 9 December 2021, 13:32 Last update: about 6 months ago

Claims that the government would have to pay €100 million to Electrogas if it builds a gas pipeline are “factually incorrect”, Energy Minister Miriam Dalli said on Thursday.

Dalli said the government would only be paying the energy company for the assets it hands over, and the payment would reflect “fair value.” The minister, however, would not say what the amount owed to Electrogas would be.

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The €100m claim was made during a press conference by the Caruana Galizia family on Wednesday. The family has written to the Slovenian presidency of the EU, calling for the removal of a derogation that allows the EU to fund Malta's gas pipeline project.

Addressing a press conference with two MEPs, the family said the public funds for the €400 million Melita pipeline project would also be flowing to the owners of a "corrupt project."

Asked for a reaction on Thursday, the Energy Minister insisted that this will not be a gas pipeline but rather a hydrogen-ready pipeline.

“Work is already ongoing so that this pipeline is repurposed for hydrogen readiness, and we are carrying out studies to analyse the availability of hydrogen around us. Hydrogen is one of the sources of energy being promoted by the EU to reach carbon neutrality, and Malta cannot lose the opportunity to tap into this source,” Dalli said.

“If this pipeline does not materialise, we will remain bound to use our gas facilities and other fossil fuels.”

The entire country will benefit from a hydrogen pipeline that would feed multiple energy generation assets, she said.

If all goes according to plan, the pipeline should be in place by 2028.

Asked if Electrogas will still be involved by then, Dalli said the pipeline would allow the country to draw its fuel directly from the European grid. “This is part of the push we are making to invest in cleaner energy. I believe that we need to move on from fossil fuels and natural gas to more renewable energy sources.”

Asked how much Malta would have to pay Electrogas to terminate the gas supply agreement, Dalli said the €100m figure that is being mentioned is “factually incorrect.”

“What there would be is a payment for the assets that would be transferred to the government, at current fair value.”

Dalli said the pipeline would have a lifespan of 35 years, whereas current facilities have a lifespan of around 18 years.

“A hydrogen pipeline would give us the possibility of being independent from existing gas facilities and moving away from fossil fuels. I believe in our aim of decarbonising the economy by 2050.”

Asked if 2028 would trigger a payment of €64 million, Dalli reiterated that it would trigger a fair value payment for the assets that would pass on to the government. “If we don’t do this, we will be paying much more per year. I prefer investing in a hydrogen-ready pipeline, that takes us away from fossil fuels.”

Asked if EU funds for this project were still ‘safe’, Dalli said the process is a lengthy one. “We managed to secure a derogation by the Council of Ministers. This leads into lengthy funding negotiations. We are ready to move step by step. It would be unfair on our citizens to miss out on the opportunity to move to a cleaner source of energy, which might also be cheaper.”

Asked when Malta will be ready to start receiving hydrogen through the pipeline, Dalli

said the government was already studying the different sources that exist, adding that she is convinced that there will be rapid developments in the field of hydrogen-derived energy.

 

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