Gibraltar’s new LNG terminal opens for business

Gibraltar took another step toward switching to liquefied natural gas for its electricity needs yesterday, as a new terminal that will feed a gas-fuelled power plant was officially opened.

The regasification terminal will store LNG shipments delivered by sea and before turning the liquefied fuel back into gas ready for use in the Gibraltar Electricity Authority’s new power station.

The terminal on the North Mole was formally opened by Chief Minister Fabian Picardo and Steve Hill, Shell’s Executive Vice President, Gas and Energy Marketing and Trading.

LNG Terminal 060519 { seq} ( Photo John Bugeja) CM together with Hon John Cortes and Shell directors on site followed by the launch and unveiling of plaque on board Sunborn

Mr Picardo, other ministers and dignitaries in Gibraltar enjoyed a VIP tour of the terminal, where they were given both technical information and an explanation of the processes carried out there.

The terminal is now fully operational and ready to supply gas to the adjacent power station.

Three of the engines within the power station have been tested and the remaining three are expected to undergo tests within the next 30 days.

Once these are completed, additional tests will need to be conducted on the electrical grid to ensure the GEA is how to deal with any problems that may arise.

“We will go through a period of stress testing where we will make it go wrong to ensure that when it goes wrong it comes back as it should and the grid behaves as it should,” Mr Picardo said.

It is expected that Gibraltar will be “going on the bars” fully on the new power station taking gas from the LNG terminal within the next 60-90 days.

“Powering Gibraltar’s homes and businesses with this reliable and cleaner energy is a hugely important step towards reducing emissions and it delivers on Her Majesty’s Government of Gibraltar’s aim of reducing carbon dioxide emissions and improving air quality around the Rock of Gibraltar,” said a statement from the Government.

Yesterday Mr Picardo acknowledged that the new facility “is not a panacea” and “has its own problems because it is still burning a fossil fuel”.

“But is so much a step in the right direction,” he said.

Mr Picardo recalled that the Government started trying to find an alternative source of fuel and a site for a new power station immediately after being elected in 2011.

He stated that the new facilities were not greatly visible, are located in an industrial area and, while powered by a fossil fuel, “produce 99.9% less pollutants than diesel”, making it “a better option” than the previous GSD administration’s plan to build a diesel-fuelled plant near Windmill Hill.

“If there is one reason I am happy for the future generation of Gibraltarians that we won the election in 2011, it is because we have been able to produce this alternative new power source for Gibraltar,” Mr Picardo said.

Speaking at a reception on the Sunborn after the terminal was formally inaugurated, Mr Picardo told guests how proud he was to have brought the facility to Gibraltar and to have partnered with a global player like Shell to deliver the project.

LNG Terminal 060519 { seq} ( Photo John Bugeja) CM together with Hon John Cortes and Shell directors on site followed by the launch and unveiling of plaque on board Sunborn

“I am delighted that the issues as to reliability of Gibraltar’s power supply and what we pump into the air by the supply of that power are now resolved for generations,” he said.

Also addressing guests was Mr Hill, who congratulated the Government for taking the LNG solution to power supply in 2011.

“Obviously the future of energy is probably a much more widely debated discussion around the world today than it was at that time,” he said.

“Today some people do not believe in climate change and in global warming and they are clearly wrong.”

“Some people think we should get rid of all our fossil fuels immediately and that is hard to understand because fossil fuels still represent 80% of energy supply today.”

He noted that people want to be warm, have mobility and charge items such as their mobile phone while also having the cleanest energy solution to do that.

“Electricity is growing from about 20% of the global energy needs today to about 50% in the near future,” he said.

He acknowledged that that growth can be accommodated with the use of renewable sources of energy and gas.

Renewables, Mr Hill said, are “great, clean, increasingly competitive, but they do not give you reliable flexibility whenever you want it.”

“It is the combination of renewals and gas that does that.”

“Introducing LNG into Gibraltar I think is a tremendous step forward in providing the cleanest, reliable, flexible, competitive source of electricity as your country continues to develop,” he added.

Ending his speech, he thanked the Government for its foresight and for picking Shell.

At the Sunborn event individuals who assisted with the project, both locally and overseas, where noted and presented with a token of appreciation.

LNG TERMINAL

The plant has a life expectancy of 30 years.

Construction of the terminal followed an LNG supply agreement signed in 2016 between Shell and the Government of Gibraltar. Gasnor, which has more than 15 years of operational experience in small-scale LNG in north-west Europe, operates the regasification terminal.

“Shell hopes to replicate the approach taken in Gibraltar in other parts of the world, where there is a need for cleaner, more reliable energy through similar small-scale LNG projects,” said a Government statement.

Maarten Wetselaar, Integrated Gas and New Energies Director for Shell said: “I would like to congratulate Gibraltar on bringing its vision of a cleaner energy system to reality.”

“Delivering this project is a tangible example of Shell’s strategy to provide more and cleaner energy. We believe that projects like this can offer real benefits elsewhere in the world,” he added.
LNG will be delivered to the terminal by ship twice a month and at night.

It will be stored in five double-walled stainless-steel tanks, each able to hold 1,000 cubic metres of LNG.

Pics by Johnny Bugeja