Melita TransGas Pipeline Interconnection

Project of Common Interest 5.19: Connection of Malta to the European Gas Network – Pipeline Interconnection with Italy at Gela

Project Promoter: Melita TransGas Co. Ltd.

Member States Involved: Malta and Italy

LAUNCH OF THE INCREMENTAL CAPACITY PROCEDURE ACCORDING TO REGULATION (EU) NO. 2017/459 OF 16TH OF MARCH 2017

Melita TransGas Co. Ltd announces that on the 2nd of July 2019 the Incremental Capacity Procedure pursuant the Chapter V of the Regulation (EU) NO. 2017/459 of 16th of March 2017 has been launched to request incremental capacity for establishing new interconnection points.

To participate to the incremental capacity process, the interested shipper must complete the form “Request for additional capacity”, together with all attachments downloaded below, and send it to the email address mtgpipeline@gov.mt, no later than 26th August 2019.

For any further clarification, please contact:

Senior Project Manager: Alexandra Meli

Telephone number: +356 22292563

e-mail: alexandra.meli@melitatransgas.com.mt

or

Policy Officer: Sorin Frosin

Telephone number: +356 22292008

e-mail: sorin.frosin@melitatransgas.com.mt

The following are the forms to request incremental capacity:

  • Incremental capacity request
  • Annex 1 – Declaration in lieu of affidavit
  • Annex 2 – Request capacity form
  • Annex 3 – Declaration for the collection of personal data

According to the article 26 of the Regulation (EU) NO. 2017/459 of 16th of March 2017, Melita TransGas Co provides the Demand Assessment Report (DAR) for the Malta-Italy interconnection point, as well as in accordance with the requests received by 26/08/2019.

Public Consultation

In accordance to the provisions set in Article 27 comma 3 of Regulation (EU) No. 2017/459 of 16th of March 2017, the public consultation document has been jointly prepared by SNAM and Melita TransGas to conduct a consultation on the identified draft project proposals to fulfil the received requests in the Demand Assessment Report (DAR) for the Malta-Italy gas interconnection point.

All interested subjects and the general public are invited to send their comments (in written form) to the public consultation document provided in link below.

Public_Consultation_Document

Public Consultation Online:

https://meae.gov.mt/en/Public_Consultations/MEW/Pages/Consultations/IncrementalcapacityforestablishinganewgasinterconnectionpointbetweenMaltaandItalyinaccordancewithChapterVoftheRegulationEUN.aspx

SNAM: https://www.snam.it/en/transportation/Online_Processes/Allacciamenti/procedure-module/incremental-capacity/request_incremental_capacity.html 

Submissions must be sent in through the following channels:

By email:      info@melitatransgas.com.mt  or

By post:        Melita TransGas Co. Ltd.  
                    12, Triq Spiru Mizzi, Birkirkara, Malta, BKR 1762

Submissions must be received by 13 March 2020.                               


Project Description

In line with the Council conclusion that “No EU Member State should remain isolated from the European gas and Electricity networks after 2015 or see its energy security jeopardized by lack of the appropriate connections”; the October 2014 European Council Conclusions where  Malta is specifically mentioned as requiring special attention in the context of PCI implementation; the March 2015 European Council conclusions where the Council  called for the acceleration of infrastructure projects, ‘including interconnections in particular to peripheral regions’ and the Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Policy’ which calls for the end of energy islands from the main electricity and gas networks, the Government of Malta intends to implement a connection to the Trans-European Natural Gas Network to end Malta’s isolation. This will be achieved by connecting Malta via an approximately 159 km pipeline to Sicily primarily for importation of gas from the Italian National Gas network.

The project has been identified as a ‘Project of Common Interest’(PCI) under priority corridor ‘North-South gas interconnections in Western Europe’ in 2013 and its PCI status has been reconfirmed in the 2nd and 3rd PCI lists adopted in November 2015 and November 2017, respectively (refer to this link for the latest list). In 2019, the Project has been re-submitted as a candidate to the selection procedure of the fourth PCI list which is expected to be adopted by the end of 2019.

As stipulated in Regulation 347/2013 on guidelines for Trans-European Energy Infrastructure, projects labelled as PCI benefit from accelerated permit granting, improved regulatory treatment and financial support through grants for both works and studies under the Connecting Europe Facility programme (CEF).

Project Impact

The project will end Malta’s isolation from the Trans-European gas network and therefore contribute to the gas market integration and improved security of energy supply for the island. The project is expected to support objectives of sustainability as it will contribute towards the reduction of GHG emissions by delivering natural gas more efficiently, eliminating the need for liquefaction, shipping and regasification as in the case with LNG, whilst also acting as a back-up for renewable energy.  It shall also contribute towards diversification of energy sources by taking advantage of the various gas supply routes serving Italy. In Malta, it will provide access to a potentially lower cost fuel for both power generation and possibly maritime transport and future inland market, thus improving competitiveness and affordability. Since the pipeline connection is being designed with the capability of bi-directional flow, it may also provide a future option to export gas to the Trans-European gas network, to Italy in particular; the project would effectively mean a new entry point of natural gas within the EU. This would complement the Energy Union’s strategy towards the diversification of sources, routes and suppliers of natural gas.

Pre-feasibility Study and Cost-Benefit Analysis

A comprehensive pre-feasibility study and cost-benefit analysis, 50% co-financed by the European Union in the field of Trans-European Energy networks (TEN-E), was completed in April 2015. The study determined the technical and financial viability of the project, including a high-level environmental impact/risk assessment and the legislative/regulatory aspects pertaining to the project. The financial and economic assessment identified a 22 inch diameter gas pipeline between Gela (Sicily) and Delimara (Malta) as the most economically feasible solution for the PCI implementation.

For further information: click here or send an email to gas-energywateragency@gov.mt. 

Route Identification and Basic Design Study

Following completion of the TEN-E funded feasibility study and cost-benefit analysis for connecting Malta to the European gas network in April 2015, the next step for the development of the Malta-Italy gas pipeline connection (Phase 1 of PCI 5.19) was to conduct a desktop route identification study including conceptual design of the required infrastructure; and prepare the necessary documentation to initiate the permit granting procedure in both Malta and Italy.

In April 2015, the Maltese Government submitted an application for funding under the Connecting Europe Facility (CEF) Energy call of 2015 for the co-financing of these studies. In July 2015, the proposal was favorably selected and awarded a maximum grant of €400,000 with a 50% co-financing rate.

Following the publication of open public call for tenders for sub-contracting the studies in June 2015, a contract was awarded to Tractebel Engineering S.p.A in November 2015.

The study commenced in July 2015 and all the activities forming part of the study were executed by the end of June 2017.

The Action identified the optimal 1.2km wide offshore and on-shore route corridor, landfall areas, connection points and sites of terminal stations in both Delimara (Malta) and Gela (Sicily) with the lowest environmental and socioeconomic impacts. This was based on known existing restrictions and a high-level risk assessment of environmental impacts from available datasets and information. The identified route corridor shall enable a preliminary marine route survey to be conducted in the next phase of the project.

The basic design of the pipeline and all related land-based infrastructure confirmed a 22” diameter pipeline with a slight increase in length to 159 km (151km offshore route, 7km on-shore route in Gela (Sicily) and 1km on-shore route in Delimara).

As a result of the study, the project implementation plan was updated and indicates that the project can be implemented earlier than what was concluded in the feasibility study of 2015. In fact, it was concluded that commissioning can be realistically achieved by late 2024.

The scoping reports and documentation required to initiate to permitting granting process were drafted by the contractor as part of the study. The main conclusions were first presented informally to the Italian and Maltese Competent Authorities. This ensured that all stakeholders had the opportunity to provide an informal yet robust opinion on the proposed offshore/onshore route and location of connection points and terminal stations in Gela-Sicily and Delimara (Malta) in order to identify any issues vis-a-vis the permitting procedure from an early stage. In May 2017, a formal letter of intent was signed between the Maltese Government and the Sicilian Energy Directorate for enhanced collaboration in this regard.

The CEF funded study has contributed directly to the development and implementation of the Malta Gas Connection PCI and through its completion, the project has progressed to the next phase, and allowed the formal commencement of the pre-application permitting procedures in November 2017. It has also enabled a proposal for CEF funding to be submitted in October 2017 for all necessary actions required to be conducted in the next stages of project implementation and the publication of  a number of tenders relating to environmental/permitting studies, a preliminary marine route survey, front-end engineering design and also the financial engineering of the project. These tenders have been awarded in late 2018 to the respective contractors mentioned here below and the activities on all three tenders are currently underway:

  • Permitting Tender: awarded on 11/09/2018 to the Joint Venture MT-IT JV (AIS-CESI-VDP)
  • PMRS Tender: awarded on 19/09/2018 to Lighthouse SpA
  • FEED Tender: awarded on 07/11/2018 to the Joint Venture between Techfem and SPS

For further information: click here or send an email to gas-energywateragency@gov.mt

Preliminary Marine Route Survey

Odin Finder - PMRS Vessel

Odin Finder – PMRS Vessel

A Preliminary Marine Route Survey (PMRS) was required during this preparatory phase of the project prior to its implementation. The survey was carried out on the offshore pipeline routing corridor which was 1.2km wide and 151km long between Malta and Sicily. The campaign involved geophysical, geotechnical and environmental activities in order to determine the characteristics for an optimal pipeline design with minimal environmental disturbance. Following the survey, a post survey assessment (PSA) was then carried out in order to formalize and investigate the actual findings.

The PMRS survey was carried out using a number of different vessels depending on the location and the type of intervention. First, the geophysical survey was carried out using a multitude of different equipment including a multi-beam echosounder (MBES), a side-scan sonar (SSS), a magnetometer and a sub-bottom profiler (SBP). With this equipment, it was possible to determine the bathymetry and morphology of the area. Furthermore, the resolution of the survey allowed the mapping of all obstructions along the routes such as existing cables, natural formations, anthropogenic objects and other artefacts. Additionally, the geological stratigraphy was also obtained for the corridor under investigation to allow the interpretation of the shallow geology.

Following the geophysical survey, a geotechnical and environmental sampling campaign was executed. These activities called for the use of some different vessels and equipment from that mentioned above including the use of drilling barges for boreholes, gravity corers, box corers, core penetration testers (CPT), niskin bottles and plankton nets. This geotechnical phase of the survey allowed the determination of the subsurface properties through investigation of the seabed whilst the environmental study allowed the investigation of the seabed ecology and biodiversity by analysing the sea water quality and sediment characterization.

Finally, all of the above allowed the determination of the optimal 500 m wide pipeline corridor to be investigated further by the Front-End Engineering Design (FEED) contractor and eventually by the EPC contractor during the final design and construction stage. Therefore, the results of the survey and their interpretation through the PSA was crucial in order to determine the optimal pipeline route not only from a design point of view but also from an environmental conservation perspective.

The marine survey was conducted by Lighthouse following a public call for tenders and is being 50% co-financed by the European Union under the Connecting Europe Facility program.

Permitting

Following the submission of the necessary documentation and Scoping Reports to the Planning Authority as Malta’s Competent Authority and the Ministero dello Sviluppo Economico, as Italy’s one stop shop, the pre-application permitting procedures formally commenced in November 2017 where both Authorities acknowledged that the project is mature enough for the launching of these procedures as stipulated in the TEN-E Regulation. The terms of reference of the EIA studies were issued by the Italian and Maltese Authorities at the end of November and beginning of December respectively.

Pursuant to Article 9(4) of the TEN-E Regulation, the first round of Public Consultations were held in Gela, Palermo, Rome and Malta and the positive outcomes have been an important input for the ongoing permitting activities. The Environmental Impact Assessment (EIA) studies, marine route survey and the front-end engineering design (FEED) study, are currently being carried out. The findings from these studies are essential to obtain the necessary permits and to prepare the engineering, procurement and construction (EPC) tender for building the infrastructure.

Project Promoter

Melita TransGas Company Limited (MTG Co.) was established as a public undertaking to succeed to the obligations of the ‘Ministry for Energy & Water Management’ as the previous Project Promoter of PCI 5.19. The company will take the functions of the Project Promoter to implement, construct, commission and operate the MTG Pipeline and shall be entrusted with the future function of the Transmission System Operator.

Cross-Border Cost Allocation Procedure (CBCA)

Following the non-binding market test conducted in April-May 2018, the project investment request has been prepared and officially submitted on the 17th April 2019 to the National Regulatory Authorities (NRAs) in Malta and Italy.

After the assessment of the documentation, the relevant NRAs have jointly issued the Coss-Board Cost Allocation (CBCA) decision on 4th June 2019, stating that ‘Malta should bear 100% of the costs of the MTGP project and as such, no monetary transfer is needed between Italy and Malta’, which as been published on their respective websites:

Arera Website (Italy) & REWS Website (Malta)

Permitting Process Timeline:

Indicative Date Narrative
30/03/2018 Start of 1st Public Consultation Period in Italy and Malta as part of Pre-Application Procedure pursuant to Art 9(4) of the TEN-E Regulation
10/04/2018 Public Consultation Meeting in Marsaxlokk (Malta)
17/04/2018 Public Consultation Meeting in Gela (Sicily – Italy)
18/04/2018 Public Consultation Meeting in Palermo (Sicily – Italy)
19/04/2018 Public Consultation Meeting in Rome (Italy)
20/05/2018 End of 1st Public Consultation Period
05/2019 Submission of the Full Application file
10/2019 Acceptance of Full Application File:

 

End of Pre-Application Procedure & Start of the Statutory Permitting Procedure

Q4/2019 – Q1/2020* 2nd Public Consultation as part of Statutory Permitting Procedure
07/2020 (latest) Issuance of Comprehensive Decisions from Italian and Maltese Competent Authorities

Preliminary Project Timeline:*exact period to be determined at a later stage

Activities, Completion Year Narrative
Q2 2019 Submission of Investment Request/ CBCA proposal
Q3 2019 Submission of Permit Full Application Files (EIA studies) to the Maltese and Italian Competent Authorities
Q3 2020 Issuance of Italian and Maltese permits
Q4 2020 Publishing of Tender for EPC Contract
Q4 2021 EPC Contract Award
Q4 2024 Construction & Commissioning

Summary of the Preliminary Investment Cost Estimate of the Project

CAPEX* Cost €
Material Supply (offshore & onshore section) 169,000,000
   
Offshore Construction – Gela shore approach 17,100,000
Offshore Construction – Malta shore approach 5,500,000
Pipeline offshore installation 123,700,000
   
Gela onshore pipeline construction including terminal station 18,000,000
Malta Terminal (including construction) 9,800,000
Engineering & Management 56,100,000
TOTAL 399,200,000
* +/- 30% accuracy