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Azerbaijan state oil company’s LNG supplies to Malta exceed obligations

electrogas LNG Malta
The LNG tanker in Malta.

Azerbaijan’s state oil company SOCAR announced that its supply of liquefied natural gas (LNG) to Malta last year exceeded contractual obligations, saying it sent an additional two LNG cargoes to the Island in 2018.

SOCAR said it envisaged the supply “of around six cargoes per year,” according to Trend which describes itself as a news provider from the South Caucasus, Caspian region and Central Asia. It said the increase in supply was due to “the country’s economic growth”.

Apart from being the government’s chosen supplier of LNG for the country, SOCAR also owns a 20% share in the Electrogas consortium, which built and operates the gas power plant in Malta which has been mired in controversy from the start.

A recent probe by The Times of Malta and Reuters revealed the mysterious owner of 17 Black, a company in Dubai set up to pay Tourism Minister Konrad Mizzi and the Prime Minister’s chief of staff Keith Schembri’s Panama companies Hearnville and Tillgate €150,000 a month, according to leaked emails.

The investigation revealed 17 Black was fully owned by the chief executive of the Tumas Group Yorgen Fenech . The Tumas Group is also a partner in the gas power station pushed by Prime Minister Joseph Muscat in the 2013 election.

The Guardian had reported that leaked contracts showed that the price at which Electrogas buys gas from SOCAR was fixed for five years. In 2017, Enemalta paid Electrogas at least €131.6 million for gas, which is nearly twice the open market rate.

Tourism minister Konrad Mizzi had piloted the project when he held the energy portfolio and, as revealed by The Shift News in April, he had personally signed the agreement for the supply of LNG to the Electrogas power station for 18 years.

Although the government has kept this agreement hidden from the public, Malta’s anti-money laundering agency, the FIAU, had questioned Mizzi’s personal interest in the deal that gave SOCAR exclusivity on the supply of LNG.

Anti-corruption organisation Global Witness raised concerns about the major deficiencies in the tendering process of Azerbaijani’s state-owned oil company SOCAR and its opacity, according to a report by Transparency International UK.

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