Sargas plant ‘could be powered by gas’
Norwegian firm welcomes request for full feasibility study on project
Sargas CEO Henrik Fleischer. Photo: Jason Borg
Sargas, the Norwegian company proposing a €1 billion investment in a clean energy power plant, yesterday welcomed Malta’s decision to ask it for a full feasibility study, saying the plant could also be run on gas.
The company’s CEO Henrik Fleischer told The Times he was pleased the Government had conceded that the proposal would translate into cheaper utility tariffs.
The company was now looking forward to further talks.
Mr Fleischer added that Sargas had not yet received a formal request and had learned the news from the media.
“It has taken us over three years to concretise an understanding on feasibility between the parties,” Mr Fleischer said from his Oslo office.
He said the technology was being set up in several countries, particularly the US, adding: “We have not given up on Malta in spite of our massive investment programme in other countries.”
Mr Fleischer made it clear that Sargas was willing to address all the issues identified by a pre-feasibility study commissioned by the Government from KPMG.
The project offered to Malta, he underlined, was not intrinsically linked to biomass or coal as a fuel but gas was also “a veritable possibility.”
The Sargas technology would lead to “near zero emissions” and the carbon capture technology would put Malta at the forefront of environmental conservation. Martin Roden, director for business development, said the company hoped to have further discussions with Enemalta soon in order to decide the way forward.
Introduced to the Government and the Opposition by former European Commissioner John Dalli, the Norwegian company is proposing a €1 billion coal-fired, barge-mounted steam plant drydocked at Marsaxlokk Bay and capable of producing energy at a much lower cost than current rates.
In exchange, the company wants Enemalta to enter into a 30-year power purchasing supply agreement with it.
The issue had become a political hot potato, with the Opposition accusing the Prime Minister of ignoring the proposal and the Government saying Labour wanted to revert to the use of coal.
On Tuesday, the Government said there were many questions still to be answered following the pre-feasibility study and it wanted the company to do a fully-fledged feasibility study if Enemalta was to keep the project under consideration.
KPMG identified some major issues that need to be assessed in much more detail, among them the fuel use (coal and biopaste), the carbon capture and storage technology, maritime issues and environmental considerations.
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42 Comments
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Anthony Scicluna
Nov 22nd 2012, 16:41
When was the technology to Gas available? Wasn't it launched only in July 2012? This is the statement according to their website. Can Sargas be clear please?
Charles J. Buttigieg
Nov 22nd 2012, 16:21
Sargas plant would not require any investment from the government. The low cost of electricity to Enemalta would be stipulated in a power purchase agreement which would be negotiated following a Feasibility study. The feasibility study would have as one main purpose to find the best options for low power price for Malta.
ANDREW BRIFFA
Nov 22nd 2012, 15:51
the Pl have been very critical because the Government in some instances did not go for tendering. Therefore are they expecting the Government (who ever should be) give Sargas a direct order for so many millions of euro (is Sargas on the Yellow pages?)
Anthony Scicluna
Nov 22nd 2012, 15:06
What 'a bunch of hooey'! This deal smells fishy. How can Sargas guarantee the price of gas will not increase over a 30 year period? What guarantees does Sargas give that it will not go bankrupt? The investment is no joke yet they are willing to take it up. Too good to be true. What happens to our power grid if Sargas fails? What extra costs are involved?
jm busuttil
Nov 22nd 2012, 15:03
Sargas will pay nearly one billion on 30 year contract deal this means that they still would want their return of nearly € 91300 daily ( € 640000 weekly = € 1.52 weekly per head for 30 years) plus the cost to run it and the fuel/gas to generate electricity ( not knowing the price ). These costs will have to be charged to us consumers as they will definitely not come free.
Tony Borg
Nov 22nd 2012, 20:38
Well in your calculation you forgot to include that the bulk of electricity in Malta is not consumed by the public but by industry, hotels and other commercial properties.
Mr Joe Cardona
Nov 22nd 2012, 14:52
Dawra durella ohra minn Gonzi PN
Triq wahda hemm ghalih li jirrezenja ILLUM QABEL GHADA.
julian caruana
Nov 22nd 2012, 14:01
WHAT ABOUT DELIMARA??? DID WE BUILD THE EXTENSION FOR NOTHING??? IMY IMPRESSION WAS DELIMARA EXTENSION WILL SOLVE THE PROBLEM ONCE AND FOR ALL.
AM I MISSING SOMETHING ???
Anthony Paris
Nov 22nd 2012, 14:28
Yes you are missing 157 million euro
david xerri
Nov 22nd 2012, 13:58
kemm kellu ragun joseph muscat..... u kemm dhaqtu bieh meta hareg b din il proposta.... issa ghax gejja l-elezzjoni tridu tinhabbu man-nies biex taparsi tigbru l voti, imma mhux ser jirnexielkom ghax in nies qed tghid li kellu ragun l PL....
Joseph Aquilina
Nov 22nd 2012, 15:31
David, don't get over excited!!
Charles J. Buttigieg
Nov 22nd 2012, 13:46
The one Billion Euro investment will be footed by Sargas. This would be a privatized investment with Sargas charging the consumers directly.
Ethelbert Schembri
Nov 22nd 2012, 13:39
Sargas need to learn one thing, if they want GonziPN to give them some sort of credit they have to first present the amount in commissions than they can start doing business. If they just present the best statistics it's useless .. with this Gov money talks !!
Hoo ... and it's better if you put and advertisement on the yellow pages.....
Anthony Scicluna
Nov 22nd 2012, 16:36
You need to think with your head, mate. Do you think that a company can guarantee an investment for 30 years with a commodity such as gas or oil? What happens if prices double in the next ten years? The indications from FT and other international papers suggest that. What happens if a cheaper source of supply appears in 15 years? You must have no clue in business
Michael Hudson
Nov 22nd 2012, 13:36
I will search the yellow pages, you never know.......
Alexander Genuis
Nov 22nd 2012, 13:30
Jien ma nafx,ftit ilhu kien hawn l-ahbar li tista ssir il-mina bejn Malta u Ghawdex,li hija ideja tajba,din giet stamata bejn wiehed u l-iehor 500 miljun euro bhala progett,l-ebda BLOGGER ACCOUNTANT ma Hareg Jghajjat u Jsaqsi mnejn se jigu l-flus!!!!!!!Dak in-nhar fejn Kontu??Ghala TBEZZAW??Mela l-ewwel ma ssirx,issa,issa ghax NFAQET BUZZIEQA OHRA ,l-ewwel KIF u issa MNEJN,MNEJN????????!!!
Frans Aguis
Nov 22nd 2012, 13:14
Thank you PL for pointing out the government didn't consider the power plant when awarding the BWSC contract.
Alexander Genuis
Nov 22nd 2012, 13:13
Veru li tiswa biljun euro,somma kbira hux hekk,pero l-fatt huwa li hija POSSIBLI,jigifieri BABAW iehor jista jmur jistahba,MIN,MIN qaghad jsaqsi KIF,KIF,Nahseb ha naqra risposta,Issa Kumpanija Barranija QALTILNA Kif,Kif,kif!!!!!Il-Fondi jistghu jigu,n-naqqsu il-KUNSULENZI bla bzonn,nnaqqsu xi PROGETTI li nghaddu minghajrhom,nnaqssu xi commission ta zewg MILJUN Euro,etc,etc,etc............!!
j brincat
Nov 22nd 2012, 13:09
George Cutajar
"Ad whatbwill bethe cost of gas? Will this come via a pipeline? Will we have a guaranteed fixed price?
But do we have a guaranteed fixed price for our purchases of oil, fuel and gas cylinders?
Obviously not - so much so that these go up on a monthly basis.
Remember that the PN government (Bonnici) did away with the old practise of forward buying.
(jb)
P Mangion
Nov 22nd 2012, 12:56
the one billion euros will be paid by Sargas, as they have always stated in the media, in exchange for a 30year agreement. this is not unheard off - many Maltese businesses operate in this way. whereby the investment needed for one particular project (be it construction or manufacturing or even services) would be backed up by promised/guaranteed sales orders.
Ron Cassar
Nov 22nd 2012, 12:41
http://www.timesofmalta.com/articles/view/20111209/local/Sargas-s-guarantee-on-price-questioned.397572
"The company is proposing to fund the cost of construction itself and guarantee the output price in exchange for a long-term service contract with Enemalta."
Charles DeMicoli
Nov 22nd 2012, 12:29
"Mr Fleischer added that Sargas had not yet received a formal request and had learned the news from the media."
What a way to conduct business!
carmel cassar
Nov 22nd 2012, 12:17
More hints that the election is round the corner.
C Demanuele
Nov 22nd 2012, 12:04
Probably now people will say 'Qed tara!!'
question: who will pay the 1 Billion Euro?
answer: through utility bills I should guess.
so, cheaper utility bills in 10 years ... but at least a cleaner air!!
J Tabone
Nov 22nd 2012, 12:35
That 1 billion is payable over 30 years and the initial investment is SARGAS's! Do we have ANY guarantee that the BWSC's generators will last 30 years? Nobody on earth gives you that guarantee. SARGAS does as it wants a contract with Enemalta for that at least that period of time. That will guarantee cheaper utility rates than those we "enjoy" at present! And there is a choice of fuel!
P Farrugia
Nov 22nd 2012, 12:01
Il-kummissjonijjiet jigu l-ewwel u qabel kollox. Kieku kellna politici kapaci u honesti kieku pajjizna genna ta
l-art ibda mit-toroq, energijja, transport pubbliku etc., etc.
Richard wWoolley
Nov 22nd 2012, 11:58
You have to worry about someone who uses a word like concretise
A Zammit
Nov 22nd 2012, 11:41
€1 billion eħfef mill-kaxxa ta'Malta...u żgur li kellu raġun Joseph!
George Cutajar
Nov 22nd 2012, 11:35
Ad whatbwill bethe cost of gas? Will this come via a pipeline? Will we have a guaranteed fixed price? What if the EU does not provide us with substantial funding? Who will fund the pipeline.
Joseph Galea
Nov 22nd 2012, 11:35
Dejjem jitla f' wicc l-ilma z-Zejt!!!
Fl-ahhar hadu risposta!!!
E. Azzopardi
Nov 22nd 2012, 11:08
And we lost so much time. Prosit.
J Tabone
Nov 22nd 2012, 10:02
Mela Joseph Muscat kellu ragun jghid li l-eletriku jista jkun orhos!
Allura dan il-feasibility study (kull ma hu studju li juri jekk jistax isir u x'ikunu l-konsegwenzi tieghu) ma setax isir qabel ma sar il-kuntratt mal-BSWC jew min huma?
carlos ellul
Nov 22nd 2012, 11:47
It wouldnt have been :Smart:. With so many :Smart: people leading us in all facts of life (immigration, energy etc) who needs the PL?
R. Azzopardi
Nov 22nd 2012, 12:19
Taf x'inhi d-differenza? Li tal-BWSC sewa 157 miljun, tas-Sargas, tajba kemm hi tajba, tiswa daqqa ta BILJUN!!!! Mnejn se ngibu?
Brian Gatt
Nov 22nd 2012, 13:16
I Stand to be corrected but if I understood the above article correctly Sargas will be forking out the costs (1Billion) for the plant if we enter in a 30yr Purchasing agreement with them. So if this was implemented 3 yrs ago We would have had cheaper bills, cleaner air & the Govt would have still 157Million to invest elsewhere..Another job well done by GonziPn proset
Anthony Paris
Nov 22nd 2012, 13:53
Mr.Gatt, you are very wrong. If Sargas was chosen 3 years ago, only the Maltese public would have benefitted. With BWSC the blue eyed boys got the benefit, and the rule is, "Blue eyed boys first" not "Malta first". I am sure you are a law abiding citizen and would not want to break the rule.
Martin Busuttil
Nov 22nd 2012, 15:31
@R. Azzopardi
Lil pajjiz mhu se tiswih xejn, ghax Sargas se jaghmlu l-investiment huma, u l-Enemalta tidhol fi ftehim maghhom, u ahna niggwadanjaw billi nhallsu kontijiet irhas tad-dawl.
Fil-waqt li tal-BWSC swit 157 miljun, u rridu nhallsuhom ahna bil-kontijiet gholjin. L-aqwa li paxxejna lil min ha 'commission' ta' xi 4 miljuni, u kuntrattur li sibnih fuq il-yellow pages.
victor caruana
Nov 22nd 2012, 09:49
qed taraw kif jitnaqqsu drastikament il-kontijiet tad-dawl.....imbasta ghidilna kif? ghidilna Kif? lanqas jekk tghidilhom ma jifhmu!!!
Marco Galea
Nov 22nd 2012, 12:08
ija? u l-1 billion min ha jhallasom?
R. Azzopardi
Nov 22nd 2012, 12:21
@Marco Galea
Dawk gejjin mill-arja! Dawn nies ma tfehmhom b'xejn. Dawn kienu nies li jonfqu lm600 biex jiffittjaw magna diesel fuq karozza biex "jiffrankaw" il-fuel. Qatt ma tghaddilhom minn rashom li biex tifdi "l-investiment" iridu jghaddu hames snin jew aktar.
Eddy Privitera
Nov 22nd 2012, 12:24
Marco Galea: L-investiment johorguh SARGAS Hekk niftar li kienu qalu xhur ilu meta John Dalli kien semmieha l-ewwel wiehed. Fill-fatt John Dalli kien ressaq dan il-progett lil Dr. Gonzi, izda ghal xi raguni stramba, intefa fil-kexxun !
Frans Aguis
Nov 22nd 2012, 13:18
@Marco
"Presented last week by Sargas CEO Henrik Fleischer, the plant is estimated to cost between €800m and €900m. The company is proposing to fund the cost of construction itself and guarantee the output price in exchange for a long-term service contract with Enemalta."
Please choose the reason of your report below: