The government has reached an agreement with global energy giant BP for Malta to be supplied Liquid Natural Gas (LNG) until the end of May 2027, as the country’s current hedging deal approaches its end date, the Prime Minister announced on Sunday.
Speaking in a telephone interview on party media on Sunday, Abela praised Enemalta for the diligent way it had reached the deal despite the current volatility in energy prices. “This is evidence of what happens when you are decisive from the off,” he said.
Although he did not give exact details, Abela said that the deal would guarantee supply for Malta at a “good, competitive price” until the end of May next year.
“Let us keep in mind the particular context that we are negotiating in,” Abela said, noting that oil prices are still sky high.
In a statement later in the morning, Enemalta said that the agreement was awarded “following a competitive process that attracted interest from seven established international suppliers.”
“Following a detailed commercial and technical evaluation by Enemalta, the offer delivering the best overall value and security of LNG supply for Malta was selected. The agreement forms part of the Government's long-term strategy to ensure Malta's energy security of supply of electricity for families and businesses,” Enemalta said.
The country’s energy provider said that since the conversion of the Delimara Power Station to natural gas, Malta has moved away from the use of heavy fuel oil, reducing local air pollutants while improving the efficiency of electricity generation. This transition remains one of the most important milestones in the country's energy sector.
“While global LNG prices continue to be affected by geopolitical tensions and conflicts, market forecasts indicate that pricing conditions are expected to become more stable over the coming months. By securing volumes through this agreement, Enemalta is strengthening its ability to manage market risks and ensure continuity of supply during a period of ongoing international uncertainty,” the company said.
The company said that the LNG supply agreement is linked to the Title Transfer Facility (TTF) index, the principal European benchmark for natural gas pricing. By using a transparent and internationally recognised pricing reference, the agreement ensures that LNG procurement costs remain aligned with prevailing market conditions.
“This approach provides a clear pricing mechanism while enabling Enemalta to benefit from anticipated improvements in European gas market stability and lower prices, supporting the company's ongoing efforts to manage energy costs and safeguard security of supply,” Enemalta said.
The company said that while this agreement secures LNG supplies until the end of May 2027, it is already working in parallel on arrangements that will ensure continuity of supply beyond the period covered by this contract.
“The company is closely monitoring developments in international energy markets to identify the most advantageous procurement opportunities. This approach reflects Enemalta's commitment to long-term planning,” the company said.
The company said that this agreement complements its wider investment programme aimed at strengthening Malta's energy infrastructure. It added that over recent years, it has invested heavily in modernising and expanding the electricity distribution network through new substations, underground cable systems and grid reinforcement projects. These investments have improved the resilience and flexibility of the network while supporting growing demand for electricity, it said.
“Looking ahead, Enemalta is continuing to implement its ambitious nine-year investment plan, which is focused on further strengthening and modernising Malta's distribution system. The plan includes substantial investment in new infrastructure, distribution centres, network upgrades and technologies that will increase capacity, improve reliability and support Malta's ongoing energy transition. Together with the securing of long-term fuel supplies, these investments form part of a comprehensive strategy to ensure that Malta's energy system remains secure, resilient and prepared for future challenges,” Enemalta said.
“Enemalta remains committed to delivering secure and reliable energy while continuing to pursue investments that strengthen the country's energy infrastructure and provide long-term benefits for consumers and businesses.”