Power cut sparks political row over LNG plant

A failure in a temperature sensor for a vaporiser supplying liquefied natural gas to the power station was the cause of a power cut on Thursday that left people in the dark even as it sparked a political row.

The power cut happened shortly before 8pm on Thursday evening and affected many areas across Gibraltar.

It took around 30 minutes for power to be restored.

No.6 Convent Place said GASNOR, the company that operates the LNG terminal owned jointly by Shell and the Gibraltar Government, had pointed to an electrical failure and that the situation had not been dangerous.

“The shutdown of the plant was as per design, which is described in the approved safety report,” No.6 said.

“The Government further understands that GASNOR have confirmed to the Environmental Agency that there were no safety concerns arising from the shutdown of the plant.”

The Government said it was in contact with GASNOR to ensure that there was no further repeat of this situation, the second such power cut in the space of days.

It is also consulting its lawyers on matters relating to liability for the failure of the gas supply to the GEA power station.

But the power cut led to political exchanges after Chief Minister Fabian Picardo tweeted on Thursday night that the situation was “unacceptable”.

Mr Picardo said he wanted answers for the public and that the Gibraltar Government was seeking “urgent information” from Shell and reserving its rights against that company.

That triggered Twitter exchanges with GSD MP Roy Clinton, who later issued a statement and said the Government could not avoid responsibility for the power cuts.

While the Government said it was reserving its rights against Shell, Mr Clinton said that position ignored the fact that the LNG plant was a joint venture via Shell LNG Gibraltar Ltd between Shell, which owns 51%, and the Government, which owns the balance.

“The LNG regasification plant was a critical piece of the GSLP’s flagship multi-million power station project at the North Mole,” Mr Clinton said.

“In his budget address of 2016 the Chief Minister announced the LNG plant would be jointly owned by Shell and the Government, with the Government having the ability to purchase the plant at the end of the 20-year contract for a nominal sum.”

“In tweets [on Thursday] night the Chief Minister stated that the operation of the LNG plant was contracted to GASNOR AS, a Shell subsidiary.”

“Shell however has disclosed that it divested itself of GASNOR AS in 2021 and Reuters reported on 8 April 2021 that GASNOR AS had been bought by Madrid-based Molgas Energy Holding.”

“The Government’s 49% interest in Shell LNG Gibraltar Limited is held by Credit Finance Company Limited [owned by the Gibraltar Development Corporation] which has provided £20.5 million in equity and loans at 31 December 2021.”

“This money is being indirectly provided by the Gibraltar Savings Bank having bought debentures issued by Credit Finance.”

“Shell LNG Gibraltar Limited is reported by Credit Finance to have made a profit of £2 million in 2021 and of Shell LNG Gibraltar’s two directors one is recorded by Companies House as still being the former Financial Secretary.”

“Instead of conveniently pointing the finger at Shell, the Government needs to seek answers from the board of Shell LNG Gibraltar Limited for which it is part owner and ask simply was the LNG supply failure attributable to the operator GASNOR AS, or is there an inherent flaw in the construction and design of the LNG Plant?”

The statement from Mr Clinton drew a response from the Government, which said the LNG facility was not operated by the Government but by GASNOR.

“As a result, all matters arising from the operation of the LNG plant are the operational responsibility of GASNOR,” No.6 said.

“Ownership of the plant does not relate to operational responsibility.”

“In fact, GASNOR has already provided an explanation as to the failure of gas supply to the GEA Power Station [on Thursday] night and the GSD should have considered that public explanation before issuing its statement seeking that very information.”