The strategic importance at EU level of MTGP has been recognized by the European Commission that selected the project 2013 for the inclusion in the first list of European Project of Common Interest (PCI 5.19), in accordance with the European Union Regulation No. 347/2013 on the guidelines for trans-European energy infrastructure (TEN-E regulation), under priority corridor “North-South gas interconnections in Western Europe”. Subsequently the project has been reconfirmed in the second, third and fourth PCI list.
Being a PCI, the Project may benefit from accelerated planning and permit granting, a single national authority for obtaining permits, improved regulatory conditions, lower administrative costs due to streamlined environmental assessment processes, increased public participation via consultations, and increased visibility to investors.
PCIs are also eligible for EU co-financing under the Connecting Europe Facility (CEF). In fact, the project has already benefited from such grants and more than 4.5 million Euros have already been co-financed for all the preparatory studies.
Melita TransGas Pipeline poses a means to fulfil EU strategic energy policy goals on energy solidarity between Member States, formation of an Internal Energy Market, diversification of sources, reduced dependency on a single supply source and improved energy security. The pipeline, which can transmit 100% biomethane can also be designed in a way as to transmit 100% green hydrogen thus providing a further alternative for the decarbonisation of the energy sector and contribute to the increase in electricity demand expected due to a shift towards electromobility.
The main objective of ending isolation of a Member State and the fundamental importance of a fully functioning and connected internal energy market has long been acknowledged by the European Council.
Furthermore, by ending the isolation of Malta and linking it to the main gas networks, MTGP contributes to the development of internal energy market and to the emergence of well-functioning wholesale markets in line with ACER Gas Target Model guidelines. While Malta is already connected to the electricity market through the cable interconnection to Sicily, the island still remains isolated from the gas network as presented in the fact sheet on the “Energy Union five years on infrastructure map of a resilient energy union” which was published in 2019 and which refers specifically to the Malta-Italy hydrogen ready pipeline.
At a national level, the intention to build a subsea interconnection pipeline to Italy announced by the Government of Malta in 2013, has the solid foundations in the long-term vision of the “National Reform Programme of Malta” and has as its objective ending isolation of Malta by connecting the island to the Trans-European Natural Gas Transmission Network.
The Project supports Malta’s strategy for energy and climate change plan, as reiterated in the 2030 National Energy and Climate Plan to permanently shift the generation of electricity to natural gas as the current LNG facilities are considered an intermediate operative solution operational until the pipeline enters into service.
The project will also support the integration of renewable energy sources in Malta (mainly PV) which have increased sharply in the last few years as it will provide fuel to the sector that balances the inconsistency and reliability of renewable generation.
Moreover, MTGP complies with the Maltese plan to reduce GHG emissions by switching to a cleaner energy source (natural gas) and eliminating the need for liquefaction, shipping transport and regasification pertaining to current LNG imports.
MTGP will furthermore bring economic, environmental and social benefits to the Maltese citizens by firstly allowing for cheaper gas prices through their convergence to that of the Italian and European market and by reducing the emissions from LNG shipping.
Melita TransGas Pipeline is a clear case of how benefits can be originated by interconnecting isolated energy islands to the EU gas market, both for the country hitherto isolated and countries already constituting part of the common market. The main socio-economic benefits of MTGP are listed below:
- Ending energy isolation
- Security of supply
- Eliminating energy bottlenecks
- Completion of the internal energy market
- Contributing to sustainable development
- Can be used to achieve the Green Deal goals
Ending energy isolation
MTGP will be the first PCI that will end an EU Member State gas isolation by connecting it to the EU Gas Transportation Network resulting in solidarity and competition benefits as MTGP will allow a Member State to access the European gas market.
MTGP is key in ensuring that the EU energy system is well connected and is as a precondition for a genuinely functioning EU energy network. It poses a means to fulfil EU strategic energy policy goals on energy solidarity between Member States, and formation of an internal energy market.
Thanks to access to well-developed continental hubs, Maltese shippers will be able to capitalize on the hubs’ liquidity, gas supply instruments and trading / hedging opportunities in order to secure a stable gas supply price.
Security of supply
MTGP will provide for diversification of energy supply sources, import routes and potential counterparts. The physical connection to the European gas grid will result in a more reliable, secure and energy efficient form of transport of natural gas and will provide a direct connection to the European gas storage.
Eliminating energy bottlenecks
The pipeline shall replace the need for the temporary LNG supply and open the possibility of achieving the 2050 GHG emission objectives from local power generation by supplying it with renewable gases.
MTGP will also allow market entrants in the domestic market as there will be no more scale issues as with the current LNG setup. The technical characteristics of the existing FSU and its current location in Marsaxlokk impose logistical and technical limitations to LNG supply since not all LNG carriers can berth at the facilities or are physically compatible for such a function.
Moreover, the shipping method is considered as a bottleneck since it is a batch transport method rather than a continuous transport system as in the case of a pipeline. Therefore, any issues with the maritime transport that may lead to delays or interruptions in delivery of the fuel can jeopardize the system.
Completion of the internal energy market
MTGP will contribute towards the access to diverse sources that are able to supply the European mainland. Such sources may not be accessed with the shipping system due to the small national market and the lack of, or limited access to, the shipping facilities by such sources, which pose a barrier.
The realization of an interconnection with the Italian territory makes it possible for Malta to benefit from the vast sources of the Italian market, which is one of the most diversified of the continent. Realization of MTGP and adding Maltese demand to the EU hubs will contribute to the development of a well-interconnected, liquid and well-functioning EU gas market.
Contributing to sustainable development
MTGP will remove the requirement of the LNG supply chain and their consequent emissions. Furthermore, an inland gas market in Malta is non-existent and hence given that the capacity of MTGP is larger than the demand of the power plant, the extra capacity may allow for a possible uptake of emerging inland gas uses (i.e. transport, industrial and commercial uses) replacing other more polluting fuels. Furthermore, once hydrogen is commercially available in the European grid, the Maltese islands would already have the necessary infrastructures to import this gas into the country.
MTGP project has been supported by EU institutions also by means of approximately 4.5 million euro as grants awarded to co-finance the project development activities:
- (TEN-E funded – Decision Nr C(2013) 8516): “Feasibility Study and cost-benefit analysis of a gas pipeline between Malta and Sicily”, completed in 2015
- (CEF-Energy funded, Action No. 5.19-0011-MTIT-S-M-15): “Route identification study including conceptual design and preparatory activities for the permitting process for a gas pipeline connection between Malta and Sicily”, completed in 2017
- (CEF-Synergy funded, Action No: 2016-MT-SA-0005): “Study on the development of LNG as a marine fuel for Malta”, completed in December 2018
- (CEF-Energy funded – Action No: 5.19-0006-ITMT-S-M-17): “Studies for Malta-Italy Gas Interconnection: ESIA, marine survey, FEED, EPC tender preparation & financial engineering”, ongoing and expected to be completed in 2021