By Marica Micallef
On Monday 18th July, the European Commission agreed with Azerbaijan to double natural gas imports by 2027. Azerbaijan happened to be a major gas and oil producer.
The announcement came after Ursula von der Leyen arrived in Baku on Monday morning for talks about increasing EU energy supplies. The agreement, which aims to increase Azeri natural gas imports to at least 20 billion cubic meters per year in 15 years, will help the EU reduce its reliance on Russian energy.
Von der Leyen stated that “today, with this new Memorandum of Understanding, we are opening a new chapter in our energy cooperation with Azerbaijan, a key partner in our efforts to move away from Russian fossil fuels.”
According to the Commission, Azerbaijan is already increasing natural gas deliveries to the EU from 8.1 billion cubic metres (bcm) in 2021 to an expected 12bcm in 2022. At the end of 2020, the country had begun exporting natural gas to Europe via the Trans-Adriatic Pipeline.
Azerbaijan said at the time that it planned to send 10 billion cubic meters of gas to Europe each year, mostly to Italy but also to Greece and Bulgaria.
Did this article miss something here?
Back in 2018, didn’t we have the reporting that a cache of thousands of files from Electrogas, which has built and operates our power plant, leaked to Daphne Caruana Galizia, which shed new light on the secretive energy deals signed by the government in 2015? Weren’t we told that the Maltese taxpayers could be losing tens of millions of dollars per year in an energy deal with Azerbaijan, according to expert analysis of leaked files?
Didn’t one of these contracts discovered in the leak show a $1 billion agreement between Electrogas and Azerbaijan’s state-owned company SOCAR, under which Malta will import all of its gas needs from the company starting in 2015 up till 2025?
And since with this new deal signed with the EU, Azerbaijan will double natural gas imports by 2027, does this mean that Malta will continue to rely on Azerbaijan, once the contract expires in 2025 since it is part of the same EU?
Former Prime Minister Joseph Muscat had refused to publish the pricing information back then, so three energy experts in London had examined the files which showed that Malta had agreed to import all the required liquefied natural gas (LNG) to supply its power stations from SOCAR, which is an oil and gas company owned by the Azerbaijani government, which is often accused [that is, the government] of massive corruption, imprisoning journalists, and suppressing political opponents by human rights groups and other independent observers.
And now it happened that the EU has struck a deal with the Azerbaijani government just like Malta had struck a deal with the same government in 2015. Marelli, how many coincidences! The Maltese government must really know how to predict the future and get equipped beforehand!
An expert who had agreed to speak out back then, on condition of anonymity stated that Malta is “losing money hand over fist” on this contract.
Since 2015 when the deal was struck, till the end of March 2018, Malta had paid SOCAR at least €131.6 million for its gas — at nearly twice open market rates. Now having SOCAR in such a deal created this issue because SOCAR is just a middleman since it is not supplying Malta with gas from its own reserves. Instead, it buys LNG from Shell and then sells it straight to Malta at a profit, with a thank you note from the Maltese taxpayers’ money. Had Malta bought directly from Shell, it would have saved millions. Because while SOCAR bought gas from Shell at a price linked to daily market rates, it was reselling it to Malta at a fixed rate, causing a discrepancy and making the Maltese taxpayers lose out, being stuck at paying a fixed price which was nearly twice the average market of 2017. Has anything changed from this year onwards? This fixed price period in the contract was set to last for five years, meaning, 2020. We are now in 2022. Has anything changed?
It is estimated that, over the first year of the deal, SOCAR paid Shell $40 million less for the gas than the sum it charged Malta.
Does the new deal that the EU has agreed to with Azerbaijan, contain the same deal by any chance? Will the deal steal from the European taxpayers billions?
And where will the Azerbaijan’s ruling families continue to deposit the millions of dollars earned? Will they continue to use a Maltese bank? Will they funnel the profit into profitable investments around the world?
Senior visiting research fellow at the Oxford Institute for Energy Studies had stated that “If I was a Maltese taxpayer, I would want to know why such a poor deal was signed.”
No, Maltese taxpayers suffer from a cognitive decline en masse. As long as they shout, “Viva l-labour, viva l-Labour, hey, hey”, or “Korruzzjoni, Korruzzjoni”, they are happy with it. And those who make themselves exempt from paying taxes or are allowed to be exempt, under the red and blue flags, will surely care less.
U ajma marelli dil-gżira fil-Mediterran, l-Azerbaijan u issa l-EU wkoll mgħannqin flimkien f’dawn l-istrateġiji politiċi!
The truth is that those local organizations and even retired judges who accused Malta of corruption for having signed such a deal are now with their mouths shut after the EU signed a similar deal with Azerbaijan.