Cost of Malta’s LNG supply through BP deal will vary according to market, Energy Minister says

The cost of Malta’s liquefied natural gas supply through the new deal with BP will vary according to the market, Energy Minister Miriam Dalli told the press on Monday.

On Sunday, Prime Minister Robert Abela announced that Malta secured a deal with BP (formerly known as British Petroleum) for the supply of liquefied natural gas (LNG). BP is a global energy company headquartered in the UK.

The Prime Minister had said that BP guaranteed LNG provision at a good price, and that the deal will be in place until the end of May 2027.

The Nationalist Party then called for the details of the deal, such as the price, to be made public.

Questioned by the press on Monday, Minister Dalli said that a number of international companies showed their interest in an agreement, and Enemalta undertook a process involving foreign legal technical experts to ensure that it would lead to the best price. Enemalta had said in a statement that the competitive process had attracted interest from seven established international suppliers.

The deal for the provision of LNG to the country, Minister Dalli told the press, was signed with BP, saying it handed in the best offer.  She said that the deal, both in terms of the agreement and price, is based on international standards.

The minister said that in the energy sector prices vary according to markets. “This agreement is based on the TTF (The Dutch Title Transfer Facility), the European benchmark for natural gas,” she said, adding that the price will vary as it has over the past years.

“When the energy price was pegged to Brent crude prices, it would vary according to the price of Brent. This time we are talking about a European market, the TTF, which will regulate this price.”

She said that the current price at which an energy unit is purchased through the Interconnector is 12c4, “and we are calculating that with the agreement regarding the LNG contract, we are looking at a total unit price of around 11c9. There were times when the price per energy unit was much higher, and times when it was lower, so it varies according to the market.”

Minister Dalli said that the international experts advised against long-term agreements at present, as in 2027 the provision of LNG is expected to increase, “so a long-term agreement before then would not be wise.”

Enemalta, meanwhile, had said that by using a transparent and internationally recognised pricing reference (the TTF), the agreement ensures that LNG procurement costs remain aligned with prevailing market conditions. “This approach provides a clear pricing mechanism while enabling Enemalta to benefit from anticipated improvements in European gas market stability and lower prices, supporting the company’s ongoing efforts to manage energy costs and safeguard security of supply.”

Despite fluctuations in the energy supply market over recent years, the Government has been subsidising prices for consumers since the Covid-19 pandemic.