Enemalta secures substantial LNG order with ‘locked in’ price with Enel

Enemalta brokers “contract for difference” in which price for the supply of liquified natural gas to Malta is pegged against that of Brent crude oil

Enemalta has signed for a locked-in price to procure substantial volumes of Malta’s supply of natural gas, from Italian trader Enel, The Times has reported.

Enemalta, as the state energy supplier, brokered a “contract for difference” with Enel – somewhat akin to a hedging agreement – in which the price for the supply of liquified natural gas to Malta is pegged against that of Brent crude oil.

Enel would have to make up for any fluctuations in price, while Enemalta will be able to keep utility bills stable while absorbing any potential price hikes.

Wholesale gas prices more than doubled over the past year between a slowdown in production due to the COVID pandemic, and the Russian invasion of Ukraine.

The agreement for a locked price set with the Italian oil trader is intended to minimise the island’s exposure to fluctuations in Brent prices. “

The actual purchases of LNG on the international market will not be made by Enemalta, which has only set the price at which it must be bought.

It is Electrogas, the company behind the controversial Delimara 4 gas plant, that will buy the gas to convert into electricity.