EU backs Malta LNG power project

The European Commission approved the Maltese plans to pay Electrogas Malta, operator of the Delimara plant, for providing electricity to the power company, Enemalta. 

The aid approved under the EU state aid rules, will compensate Electrogas for the additional cost of fulfilling public service obligations.

In June 2016, Malta notified plans to support the Delimara gas and power energy project to the Commission for assessment under EU state aid rules.

The project comprises of a floating liquid natural gas storage unit and a new combined cycle gas fired power plant. The storage unit will supply gas to the new power plant as well as to an existing plant.

The FSU Armada Mediterrana arrived in Malta in October last year. Built under a $300 million contract Bumi Armada won from ElectroGas in 2015, the FSU is a conversion of MOL’s 125,000-cbm MOSS LNG carrier Wakabu Maru.

The unit received the first cargo on Wednesday, when the Shell-managed 136,600-cbm LNG carrier Galea docked beside the FSU in the Marsaxlokk Bay. The delivery marks the start of the commissioning process of the FSU and the new power station, built by ElectroGas.

European Commission adds that the project aims to decrease electricity prices, reduce environmental damage from energy production, and increase security of supply by diversifying the energy mix, partly replacing the existing electricity generation infrastructure in Malta.

Electrogas Malta has a public service obligation to make available electricity and gas to Enemalta, and supply electrical energy and gas when dispatched by Enemalta, under an 18-year contract.