LNG Fuel

Project no. and Name:

Technical study and the cost-benefit analysis for the development of liquefied natural gas (LNG) as a marine fuel. 
Energy and Water Agency within OPM & Transport Malta
Total Project Amount:
€1,000,000; Budget allocated to Transport Malta amount to €60,000 with a co-funding rate of 50%
Project details:
The overall objective of the global Project of which the Action is a part, is the provision of LNG bunkering facilities in Malta to enable the fuelling of sea-going vessels with LNG, as an alternative fuel. The current Action contributes to the implementation of the energy PCI 5.19 ‘Connection of Malta to the European Gas network - pipeline interconnection with Italy at Gela and/or offshore Floating LNG Storage and Re-gasification Unit (FSRU)’, which consists of a 155 km gas pipeline interconnection from Delimara (Malta) to Gela (Italy) as Phase 1; and an offshore Floating LNG Storage and Re-gasification Unit ('FSRU') located 12 km offshore Delimara/Marsaxlokk as a possible Phase 2 option aiming at ending the island’s gas isolation. The Action will also contribute to the removal of internal bottlenecks in relation to the implementation of Directive 2014/94/EU for a sustainable and efficient transport system.

Through the technical studies, the Action will identify the optimal infrastructure solutions for the development of maritime LNG bunkering in Malta’s core network ports of Marsaxlokk and Valletta; and offshore Malta. The results of the Action will determine the technical and economic feasibility of Phase 2 option (i.e. offshore FSRU) of the PCI 5.19, being one of the solutions to be analysed, and will provide the main technical parameters (ex. sizing, capacity, location), a CBA and a risk assessment. The technical/economical feasibility together with a risk assessment for the infrastructure solution where LNG is sourced from Phase 1 of the PCI (i.e. gas interconnection) through a form of liquefaction & storage will also be a deliverable of the Action and will directly contribute to possible infrastructure coupling and maturity for Phase 1 of the PCI.

More specifically, the Action will be implemented through the following Activities:

Activity 1: Project Management, dissemination and public awareness - The overall management of the Action to ensure that Activities 2 to 5 are executed and successfully completed within the established scope, time-frame and budget.

Activity 2: Detailed Option Analysis & CBA – A technical study including a market demand forecast and a multi option analysis for the identification of the optimal infrastructure solutions in three different time periods taking into account market demand and attractiveness, technical feasibility, economical, environmental, geographical, safety and risk aspects; and in complementarity to and in commonality with PCI 5.19. A socio-economic cost-benefit analysis shall be conducted on the highest ranked solutions including Phase 1 and Phase 2 options.

Activity 3: Risk Assessment Study – A hazard identification study and preliminary qualitative risk assessment for the optimal solutions identified in Activity 2 in order to identify, analyse and evaluate the related risks for each infrastructure solution and bunkering methods adopted. This activity shall include a simultaneous operation (SIMOPS) assessment, propose mitigation measures and safety and security zones guidance and also identify the roles and responsibilities of all stakeholders/organisations involved.

Activity 4: Legislative/Regulatory Analysis – To analyse pertinent legislation, regulations, codes and standards to identify gaps and propose changes in order to enable LNG bunkering to be implemented within the Maltese territory.

Activity 5: Training Needs Analysis – To determine the competences and qualifications required for LNG bunkering operations, identify the training needs and propose the required detailed training programmes/curriculum to ensure that personnel are trained to the required standards and in line with identified needs.

The Action has two beneficiaries:- the Office of the Prime Minister of Malta (OPM- Energy and Projects) and Transport Malta (TM). The OPM will act as co-ordinator for this Action. The Implementing body of the Action will be the ‘Energy and Water Agency’ which is an agency set up within OPM (Energy & Projects) tasked with the design, implementation and dissemination of water, conventional and alternative energy polices. Transport Malta shall provide information, safety and security issues, feedback and expertise with regards to the maritime ports in Malta and present fuel bunkering market.

The outcome of the Action will be studies and reports the results of which will be used to directly support the Government of Malta in the adoption of a national policy for the implementation of the required LNG bunkering facilities for the island of Malta thus stimulating the LNG uptake as a marine fuel and attract potential investors in this sector.

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