[WATCH] Brussels cannot ditch gas pipeline overnight, minister says

Malta’s minister for water and energy Michael Farrugia has said the European Union cannot discard support for the island’s gas pipeline overnight, as the prospect of a €200 million grant now hangs in the balance.

The government was left stunned by the European Commission’s decision not to disburse the investment from its Connecting Europe Facility, after Malta’s project for a natural gas pipeline to Sicily was not deemed urgent enough.

The EC has claimed Malta is well served for its energy needs by the electricity interconnector to Sicily and the floating LNG terminal supplying the Delimara plant.

“We still think Malta was given a direction,” Farrugia said on the island’s project for the gas pipeline, which has been in place since 2014 and for whose studies have already been funded by the CEF.

“That direction cannot change overnight. We’re in discussions with the EU for this necessary investment to continue. We’re expecting proposals from them. I can assure you this matter is not yet over,” Farrugia told MaltaToday.

The minister said Malta’s pipeline project was now a “matter of principle”.

“You cannot change your support for such infrastructural initiatives from one day to the other,” he said, referring to the EU. “I’m sure the funds for the pipeline, perhaps with different conditions, will still be made available to us.”

The project for the €400 million pipeline to Sicily lost points on just two of seven mandatory criteria under which the CEF funds can be released. It needs to pass on all seven to have the money released to start building the pipeline. Yet Brussels believes Malta is now well-serviced by the subsea electricity cable to Sicily, which was damaged just two days before Christmas 2019, leading to a nationwide blackout.

A gas pipeline would allow Enemalta or Electrogas to plug into the natural gas supply from Europe, without the need for an LNG vessel to be anchored off Delimara; as well as reduce dependence on the subsea electricity cable.

But the Commission also claims it is unclear as to why replacing the LNG vessel with a pipeline would give the island security of supply – politically the main argument for Malta’s demand for the pipeline.

Brussels also says that since tiny Malta has no competitive market for gas – only Electrogas supplies gas to the Delimara 4 and 3 plants, which power the entire island – then there is no demonstrable need for the pipeline to supplant the LNG vessel.

Maltese government officials now have to apply for a fourth, and final round of CEF cash under the current EU budget later this April, in the hope of securing the millions needed to finance the pipeline.

But gas pipelines are no longer seen with eagerness in the new Von Der Leyen executive, which wants to move fast on climate targets by deprioritising gas projects. Instead it wants Europe to become the first climate-neutral continent by 2050, by favouring innovative technologies such as smart grids, offshore wind and hydrogen.

Additionally, there is an EU Ombudsman’s inquiry into the CEF’s fourth list of Projects of Common Interests (PCI), which includes the Malta pipeline.

The European Commission is suspected of having broken EU rules by not adequately assessing the sustainability of the 32 gas projects. It will have to explain to the Ombudsman whether the gas projects had ever fulfilled the criteria included in the PCI list’s dedicated regulation.

If Malta misses the boat on the fourth round, the next PCI list in 2021 – the fifth – will be more stringent on gas projects’ eligibility for cash from the EU and the European Investment Bank.