Joe Mizzi, Minister for Energy and Water Management Gives Interview to BGS Group
LNG events' influence on industry development, Electrogas' LNG project results, future LNG facilities in Malta — view from Joe Mizzi, Minister for Energy and Water Management of Malta
In 2019 Malta is hosting the 5th International LNG Congress. How does the organization of such events influence the development of LNG and energy industry in all in Malta?
LNG has been introduced in Malta only recently for the purpose of supplying natural gas to the power generation plant. Hence our country is considered as a new player in the LNG sector and such conferences help to place Malta on the industry map. Located between a significant consumer base to our north, and a number of producers to our south, Malta is strategically placed to take on various roles in the industry for the benefit of all involved.
LNG Congress will provide the platform for networking for representatives of the whole LNG chain. As a hosting country, what would you say to the participants of the Congress?
The background of the congress participants is very diverse and range throughout the whole LNG chain from suppliers, transporters, consultants, government entities, contractors and consumers. The synergy between the participants is thus important in order to maximize the benefits from this congress which we hope will contribute towards the further development of LNG trade.
A year ago Electrogas Malta has built and launched a new LNG terminal as well as regasification facilities in Marsaxlokk. What are the results of the first year of operation?
The seamless switch from liquid fuels to gas has brought a number of benefits. These include increased plant efficiency, through the substitution of an old steam plant by a gas-fired CCGT plant, lower greenhouse gas emissions due to lower intrinsic carbon content in natural gas as compared to liquid fuels, hence resulting in reduced consumer electricity prices and improved air quality.
Ecology and environmentally friendly fuels are always under discussion. Which topics of the Business Programme are of special interest for you to consider in the frames of the Congress?
Malta, being an island nation in the Mediterranean Sea, has historically been dependent on shipping for foreign trade to the extent that as at 2017, the country imported and exported more than 100% of its GDP. Indeed, good maritime connections have always been important for Malta’s competitiveness. and economic development. Maritime bunkering is an industry which drives the blue economy with total demand for maritime bunkering fuel amounting to 1.912 million tonnes (in 2016), of which 79% was Heavy Fuel Oil. In this regard, our main interests are the topics related to the developing LNG bunkering sector and small-scale LNG technology.
Socar is supplying liquified natural gas to Malta. This helped to decrease the electricity prices on 25 % and noxious emissions on 90 %. Which role plays the ecology questions for Malta and the Ministry of Energy? Which ecology issues are of main current interest for the country?
LNG is becoming an important fuel in the energy mix. It is a very clean fuel which produces low emissions as compared to the traditional fuels. As a consequence, its adoption instead of traditional fossil fuels would lead to a decrease in the global anthropogenic emissions. Malta is highly urbanized, having a very high population density therefore protection of the urban ecosystem is high on the Government’s agenda. In this regard, ambient air quality is the main issue that has to be kept in mind in decision making. In energy terms, in 2017 in Malta, fuel for electricity generation consumed 42% of the national fuel bill and therefore, the changeover to LNG brought about corresponding benefits in the emissions from this source.
Does Malta plan to develop any projects in the energy sphere in the nearest future? Which of them will be redesigned or modernized and which are you going to build from the beginning?
The next major energy project is the connection of Malta to the Trans-European gas network by having a gas pipeline interconnection between Delimara and Gela in Sicily. This is a European Project of Common Interest and permits have already been applied for in both Malta and Italy. The Environmental impact assessment process has commenced and the pipeline is expected to enter into service in 2024. The project will end Malta's isolation from the European gas market, thereby improving competitiveness and the security of energy supply to the island. Other current energy projects are aimed to increase the penetration of renewable energy sources. These projects include the introduction of mainly solar farms, as well as the production of electricity from waste. The latter also having the advantage of making use of another energy source and reducing the material ending up in our landfills.
Having a successful LNG Project in Marsaxlokk, are you planning to build more LNG facilities in Malta in the future years?
Being sited in the middle of the Mediterranean Sea, Malta has a strong maritime bunkering market. It is therefore only natural that Malta will endeavor to keep its present share of the bunkering market position in the future. With the adoption of the Alternative Fuel Infrastructure Directive, by 2025, the main ports in the EU will be required to provide LNG bunkering for maritime transport. In this regard, Malta is conducting a study which is being co-financed under the Connecting Europe Facility (CEF) Synergy programme. The technical study will include also a cost-benefit analysis and will study all possible technical solutions for developing the required LNG bunkering infrastructure. Results will be used to directly support the Government of Malta in the adoption of a national policy in this regard.
According to statistics, Malta was among the countries with the lowest shares of clean energy sources in 2016 with just 6% of energy coming from renewables. How did the situation change during the last two years? And speaking about LNG as clean energy fuel, what is its share in comparison with other sources. And which level do you plan to reach in the future?
The statistics being quoted refer to the contribution from renewable energy sources, which is being increased at a rate of around 1% per year to reach 10% by 2020 in line with Malta’s international obligations. The relative low target reflects Malta’s limited resources, restricted space, and high population density. However, one is to note that the move towards LNG as a fuel for generation, together with the commissioning of an electricity interconnector with Sicily, has indeed contributed to a much larger extent towards the decarbonization efforts of Malta, and made it possible to lower the overall Greenhouse gas emissions to pre-1990 levels, and more than half the GHG emissions from the generation sector.
Tell us about your current relationships with Italy. As far as I know, you are developing an energy project, what are its the main objectives?
The cooperation between Italy and Malta in the energy field is very good. Malta is already connected to the European electricity grid through the Sicily-Malta electricity cable interconnector. The present gas pipeline project is another large infrastructure project which will import gas to Malta from the Italian gas network and this will further increase the cooperation in the energy field between the two countries.
Last year has seen the Amendments to Declaration of Cooperation between participants and non-participants of OPEC. The main idea is to regulate the price of oil. Malta currently imports the natural resources. Did you manage to find the best price options with the exporting country? How did it influence the market?
Now that the generation sector has shifted away from its dependence on oil, the international oil price mainly affects the local prices of transportation fuels. To note that a significant share of Malta’s heating requirements and practically all cooling requirements are met by electricity. The transport fuel sector is fully liberalized and operators are free to adopt their preferred procurement strategy. Of course, one would expect the retail prices to somewhat follow international oil price trends.
Which international energy projects look beneficial for Malta nowadays? Which projects will be in priority for you in the next two years?
Apart from local renewables, Malta imports all other primary fuels. Therefore, Malta is interested in all international energy projects which have an impact on the availability, diversity of sources and cost of such fuels. Malta is also interested in renewable energy projects which may be applicable to the national scenario technical and socio-economic characteristics.
New energy development has become important to Malta's energy and economic future. How are you going to attract new investments as well as big oil and gas players to Malta and your new projects?
Being in a strategic location, Malta already hosts a representation of the large oil and gas companies which offer services in the energy field including fuel storage facilities. This congress would also serve as a platform for Malta to highlight its potential in this sector.
In the process of launching LNG initiative, did you look into other countries’ success stories or did you create your unique path?
It was a combination of both. We looked at what worked in other countries, but then tailored a solution to Malta’s requirements.
Do you think that there should be some kind of institution that would unite all the governments who support LNG and would give grounds for cooperation and meetings?
The European Union has already has adopted an LNG and Gas Storage Strategy for the scope of exploiting the full potential of access to a growing international LNG market thus contributing to the key Energy Union objective of a secure, resilient and competitive gas supply. While every nation would have its unique requirements as regards LNG fuel, a possibility for such cooperation would be to set-up an institution where governments can discuss the developments and opportunities in this sector and work closely with international stakeholders to promote free, liquid and transparent global LNG markets and encourage the use of LNG as an alternative fuel in transport, heat and power thus supporting the EU’s sustainability objective.
What do you personally think about different energy sources? How do you think, what energy future will Malta have?
No social or economic progress can take place in the absence of energy sources. The more diverse the energy sources, both with regards the type as well as geographic source, the more Malta would benefit in terms of security of supply. Renewables will also play an increasingly important part in the future mix and it is one of the aims of the government to increase their local contribution. This is also in line with EU Energy Strategy and policies in this sector.