Government may help needy buy gas

Finance Minister Tonio Fenech said yesterday the government was willing to consider helping low-income families buy liquefied petroleum gas (LPG), whose new price has yet to be set.

Gas cylinders have been heavily subsidised over the years. Enemalta has been selling a cylinder for €5 when its actual production cost was about €12, the minister said.

Now that Enemalta has transferred the management and operation of its LPG activities to Gasco Consortium, the price of a gas cylinder is expected to rise. A €14 price tag has already been mentioned in the media.

Mr Fenech said that before establishing the new price, Gasco would first make a submission to the Malta Resources Authority. The government would be prepared to consider assistance to low-income families if that were required.

Enemalta Corporation and Gasco Consortium, a joint venture between Multigas Limited and Liquigas SpA of Italy, yesterday signed a 33-year concession agreement whereby the LPG operations were transferred to the new company.

Gasco Energy Ltd will be responsible for the storage and bottling while Liquigas Malta Ltd will handle the distribution of gas cylinders.

Gasco Energy Ltd chief executive Roberto Capelluto said Gasco will be investing €25 million in a new gas bottling plant at Bengħajsa and will, over the next three years, dismantle the storage and bottling plant at Qajjenza.

The agreement and provisions for the transfer of land for the new gas plant were approved by Parliament last month but Malta Environment and Planning Authority permits have not yet been issued.

After 33 years - in 2041 - the company will transfer the Bengħajsa storage and bottling facility back to Enemalta as an asset.

For now, Enemalta will continue to be responsible for the storage and bottling of LPG. As from February, the cylinders will be purchased by Liquigas Malta Ltd and distributed through the 29 distributors presently working for Enemalta.

Mr Cepelluto said the new plant at Bengħajsa will have a larger storage capacity and will be able to hold an estimated 5,000 metric tonnes of LPG, nearly double the Qajjenza facility, which stores 2,800 metric tonnes.

Moreover, new state-of-the-art equipment will enable the company to bottle 1,200 cylinders per hour as opposed to the 800 cylinders hourly throughput achieved by Enemalta.

Mr Capelluto said Gasco will be focusing on the inspection and testing of cylinders and will improve cylinder loading and offloading as well as their distribution.

The company is also planning to introduce autogas, a replacement fuel for cars. Apart from being a safer and more environmentally-friendly fuel, autogas is cheaper than other fuels and can be easily distributed.

Although this is a new type of fuel for Malta, it is widely used in other European countries. In Italy, he said, cars running on LPG can save up to 40 per cent on their fuel costs.

He said the company would also introduce LPG for air conditioning. Consumers would have to change the air conditioning system but retain the existing piping. This type of energy is more efficient and allows the equipment to operate more silently.

Outlining more of the company's plans, Mr Capelluto said consumers in Malta should expect an improved distribution system, which also includes additional sales points and regular and reliable LPG supply even in peak winter season.

Liquigas Malta, which will be responsible for distribution from February 1, will be promoting small bulk installations particularly for larger urban concentrations.

The company is willing to create an underground network of canals through which it will provide LPG which will be metered - just like water and electricity - with consumers paying for what they consume.

Enemalta chairman Alex Tranter said the signing was the result of two years of negotiation with "a strong professional partner". He said this was the first commercialisation process that will enable Enemalta to focus entirely on electricity generation and distribution.

Enemalta will now start negotiations with the preferred bidder for the transfer of the petroleum division.

He said that during yesterday's signing, Gasco officials handed Enemalta €4.5 million, being the first payment for the concession. Over the 33-year period, Gasco will pay Enemalta an annual fee.

Mr Fenech said Gasco will not have any monopolistic privileges and will be subject to possible competition now that the gas sector has been liberalised.

The dismantling of the old plant is expected to cost the company €250,000 and, after three years, the land would be free for possible development, Foreign Minister Tonio Borg had said during a political activity last month when the political parties were at loggerheads over the concession of the land in Bengħajsa.

Also present for yesterday's ceremony were Liquigas SpA. chairman Paolo Zani, managing director Paolo Dal Lago and Gasco Energy Ltd chairman Louis Farrugia.