IPA Advisory Limited a leading independent advisory practice

Enemalta plc Case Study

Project:
LNG and CNG supply options and contract negotiation support

Client:
Enemalta plc

Country:
Malta

Enemalta plc, the main provider of electricity generation and power distribution services in the Maltese Islands, planned to refuel their power plant with cleaner natural gas.  Following the issuance of request for proposals (RFP), Enemalta received expressions of interest (EOIs) from several potential LNG and CNG suppliers to supply natural gas over a 15 year period.  IPA was engaged to screen the supply options and to advise Enemalta on the gas contracting transaction.

IPA modelled the future demand growth of the Maltese power sector using IPA’s proprietary ECLIPSETM power market model, and used the analysis to determine the criteria for the gas imports and infrastructure scenarios.  IPA reviewed various CNG and LNG importation options, in respect of their technical and commercial practicality, and together with IPA’s sister company Penspen (provider of engineering and management services), conducted a technical-economic review on the gas infrastructure importation issues.  This comprised of an evaluation of the gas supply options, gas processing facility, shipping, regasification process, permits and licences, gas quality and HSE systems, construction schedules, costs and operations.

To assess the commercial feasibility of the gas supply options, IPA constructed an integrated financial model to estimate costs along the supply chain and potential savings to Enemalta.  IPA screened each fuel supply option to determine the commercial viability which considered financial risks to accommodate new capacity options.  IPA also provided further technical and commercial contractual assistance and led negotiations with the LNG and CNG suppliers up to financial close.

Enemalta was able to benefit from our work, by gaining a clear understanding of the technical and commercial implications of the potential gas supply options, ensuring they chose the most attractive fuel supply option in light of the commercial, technical and financial benefits and known constraints.