Calls for EU to drop Melita gas pipeline project intensify

Calls for the European Commission to drop any chance of funding the Melita gas pipeline between Malta and Sicily due to alleged links to corruption, murder and environmental concerns are growing as an NGO-led petition is set to make its way to Brussels.

The Melita TransGas pipeline would stretch between Malta and Sicily and replace the current LNG tanker anchored off the coast of Delimara. With an estimated cost of €400 million, the Maltese government has asked the European Commission to stump up some funds.

However, the project is controversial as the pipeline would link to the Delimara Power Plant, operated by Electrogas. One of the ultimate beneficial owners of Electrogas is Yorgen Fenech, currently awaiting trial for complicity in the assassination of Daphne Caruana Galizia.

Furthermore, other individuals involved in Electrogas, the power plant, and deals involving the provision of Azerbaijani gas are all suspected of corruption and money laundering, with several ongoing investigations.

Friends of the Earth Malta and the Daphne Caruana Galizia Foundation started a petition that will be sent to Prime Minister Robert Abela, Energy Minister Miriam Dalli and Finance Minister Clyde Caruana. It will also land on the desks of members of the European Parliament that make up the Industry, Research and Energy Committee.

“The proposed Melita TransGas pipeline between Sicily and Malta, estimated to cost €400 million, would lock Malta in a dirty fossil fuel future for decades to come,” the letter states.

“This goes completely contrary to the renewable energy transition we need and the advice of both the International Energy Agency (IEA) and the International Panel on Climate Change (IPCC), who said that ‘new fossil fuel infrastructure is incompatible with international climate goals’.”

Although the EU’s Trans-European Networks for Energy (TEN-E) rules place emphasis on renewable energies and electricity interconnections, Malta obtained a derogation, and the project was included on the 5th EU list of projects of common interest (PCI) in 2022, making it eligible for EU funds towards its €400 million price tag.

The Maltese government has argued that the pipeline would be used for environmentally friendly hydrogen power in the future, but this is not commercially used or available at present, and there is no certainty over whether and how it can be used.

Its inclusion on the 5th PCI list came despite calls from the Caruana Galizia family and several MEPs and NGOs for the European Commission to reconsider.

It also lays down the issue with Fenech and Electrogas in simple terms, noting that if the project goes ahead, Fenech “ is contractually eligible for around €85 million in “compensation” when and if the pipeline is commissioned.”

“We ask that you, as a key decision maker, champion a fossil-free future for Malta and Europe. We need you to ensure that no public money (national or EU funding) goes to the Melita TransGas pipeline project and that the project is excluded from the following PCI list*, the letter concludes.

The Shift contacted the Commission to ask whether it would be included on the sixth list, and an official did not confirm or deny.

“Member States have agreed that there is a need for Malta to end its energy isolation through integration into the trans-European gas network. On that basis, it was decided to include the Malta-Italy Gas pipeline in the 5th PCI list. The sixth list is still in the making and is due to be adopted later this autumn,” the EU official said.

They explained that even if it does make it to the sixth list, that does not mean it will get funding. The official explained that it would need a separate application process involving expert evaluation.

The official also said that, according to EU law, funds must not be awarded to project promotors, operators, or investors convicted of fraud, corruption, or conduct related to a criminal organisation.

They clarified that this could include funding anyone directly or indirectly benefitting from any such offence, or even “before a final judgment or decision, the facts supporting a conviction have been established” or “facts are not yet established, when investigations are still ongoing.”

Electrogas deal

The Electrogas deal, described as “sinister” by Council of Europe rapporteur Pieter Omtzigt, was struck with the help of ex-minister Konrad Mizzi, ex-chief of staff Keith Schembri, and disgraced former prime minister Joseph Muscat,

Months after Malta’s Labour party came to power in 2013, a major public contract was awarded to a consortium of companies, including Fenech’s and Azerbaijani State energy company SOCAR.

The Auditor General raised concerns over irregularities in the bid assessment process, selection, and the project’s overall design.

Journalists then discovered that the Maltese state energy company, Enemalta, would pay twice the market rate for natural gas through the deal, giving SOCAR at least $40 million in profit.

Further revelations showed that through a company called 17 Black, Fenech was set to make payments of €150,000 a month to offshore companies owned by Mizzi and Schembri.

Omtzigt’s 2019 report stated that the “facts have given rise to widespread suspicions of corruption and money laundering”.

The EU official also explained that aside from an independent evaluation of the entire project and those involved directly or indirectly, the EU budget is also protected by the anti-fraud office of the Commission (OLAF), the European Public Prosecutor’s Office, the Court of Auditors, the European Central Bank, European Investment Bank, European Investment Fund and other international organisations.