EU funds for Malta gas pipeline would only benefit Electrogas, Matthew Caruana Galizia says

Son of slain journalist Daphne Caruana Galizia insists that Electrogas, whose shareholders included Yorgen Fenech, will remain the sole user of any imported gas

The Electrogas plant in Delimara
The Electrogas plant in Delimara

The son of slain journalist Daphne Caruana Galizia is insisting the Electrogas consortium could still benefit from an EU-funded gas pipeline to Malta, regardless of whether the Maltese government would be liable or not for gas exit payouts to the company.

Matthew Caruana Galizia said in a press conference on Wednesday that Malta’s requests for a €200 million Connecting Europe Facility grant for its gas pipeline to Sicily, should not be acceded to, because by the time the pipeline is laid out in 2028 it would still be Electrogas – the owner of the Delimara 4 plant – that will be its sole owner and converting the gas into energy.

“Part of the gas deal was for the Electrogas shareholders, including the person accused of masterminding my mother’s murder, to receive a huge payout once a gas pipeline is constructed,” Caruana Galizia said, referring to Tumas magnate Yorgen Fenech, accused of masterminding the late journalist’s assassination.

Caruana Galizia had discovered that Yorgen Fenech, a key shareholder in the Electrogas consortium, had set up a secret offshore company, 17 Black, to funnel payments to Panama companies held by government officials, including former minister Konrad Mizzi and ex-chief of staff Keith Schembri. She had been then investigating Electrogas’s operations when she was murdered in 2017.

MEPs Claudia Gamon (Renew) and Marie Toussaint (Greens), who joined Caruana Galizia in the press conference, are co-rapporteurs for the European Parliament on fossil-free ‘TEN-E’ funds, and expressed concern on the possibility of EU funds which could be linked to corrupt energy feals.

“I don’t think we can accept a situation whereby European taxpayer money flows into a pipeline that benefits people who are accused of the murder of Daphne Caruana Galizia,” Gamon said.

She said the rapporteurs and shadow rapporteurs of the TEN-E Regulation had received a letter from energy minister Miriam Dalli, praising the pipeline project but ignoring the allegations of corruption tied to the Electrogas project.

“I find it particularly offensive that there was no word on the allegations made on what are transparent connections between the murder allegations and this pipeline project,” Gamon added.

Electrogas were contracted in 2014 to build a 200MW power plant as well as procure LNG via a floating terminal. Malta bound itself to buy LNG from Electrogas for 10 years, the first five years at a fixed price. That first phase comes to an end in 2022.

Malta obtained a derogation in 2020 to have its request for funds under the Connecting Europe Facility - recently refused for the pipeline’s dependence on fossil fuel - to be reconsidered for funding by converting it into a hydrogen-ready pipeline.

The Maltese government has argued that the EU funds will see the pipeline constructed by 2028, at which point the 10-year agreement to buy LNG from Electrogas would have terminated.

While Malta would not necessarily have to pay Electrogas for buying gas from other markets, Electrogas’s gas plant would be the sole user of any gas imported through the planned Melita gas pipeline.

Unless the plant is renationalised, or handed to another company, Electrogas will remain the entity tasked with transforming the gas into energy for Malta.

If the pipeline is constructed earlier, and government opts to purchase gas from the international market, the project could trigger an exit-price payout to the Electrogas shareholders.

“Our position has always been that the contracts around Electrogas, including conversion term agreement, were obtained through corruption,” Caruana Galizia maintained. “On that basis, the government can have the agreements unnulled by the court.”

“It has never replied to our position, whereby government should have that contract rescinded. It’s legally possible, it’s just up to the governemnt to try,” he said.

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