Ministry denial on allegations of tampered agreement with SOCAR on LNG

Tourism minister Konrad Mizzi has denied having signed Malta’s energy deal with Electrogas “in his personal capacity”, as alleged by TheShiftNews in a post about the former energy minister.

The ministry issued a denial to the article that reported leaks from an FIAU report that suggested the Electrogas agreement “appeared to have been tampered with because of a number of anomalies, such as the lack of page numbers on the agreement and text that appeared to have been scanned and converted from a pdf version of the original agreement.

The agreement was said to have been signed by Mizzi “on behalf of the government”, and SOCAR Trading’s Arzu Azimov and Emil Bayramli.

In a statement, the minister said he did not sign documents in his personal capacity, but on behalf of the government, in a direct agreement with SOCAR, the company supplying LNG to the Electrogas consortium.

The agreement was a safeguard so that the government secures the LNG supply should Electrogas not have honoured its contractual commitments with SOCAR. After the refinancing of the bridge loan to Electrogas, which ensured a security of supply, the direct agreement with SOCAR was terminated and is no longer in force.

“There never was, nor is there, any agreement or commitment by the government for the supply of LNG by SOCAR to the government of Malta, as set out in the article,” Mizzi said.

Mizzi said the LNG direct agreement secures an obligation by SOCAR to continue supplying LNG to Malta in the event it ceased doing so under the supply agreement with Electrogas.

“In such circumstances the government had the option, but not the obligation, to enter into a new LNG supply agreement with SOCAR under the terms and conditions of the LNG supply agreement between SOCAR and EGM, and for a period equivalent to the remainder of its duration,” Mizzi said.

“If the government chose not to opt for the LNG supply agreement with SOCAR under the LNG Direct Agreement, there was no further obligation on the government, and SOCAR’s recourse was only against EGM. Indeed, the LNG Direct Agreement did not contain any obligations on the government, and in particular no obligation to purchase any LNG from SOCAR.”

Mizzi the agreement was only a temporary additional measure of security taken by the government to ensure the proper functioning of the project and the security of electricity supply to the Maltese islands.

Once the bridge loan granted to Electrogas was refinanced, the requirement for the government to ensure security of supply was satisfied, and the direct agreement with SOCAR was terminated and is no longer in force.