The government of Gibraltar on Friday signed an agreement with Hague-based LNG giant Shell for the supply of liquefied natural gas for use in power generation.
Gibraltar is a British overseas territory located on the southern end of the Iberian Peninsula, next to Spain.
The newly signed deal follows the heads of agreement signed in October 2015.
It includes the construction of a small regasification unit that will receive, store and re-gasify the LNG arriving by ship for use in Gibraltar’s adjacent gas-fired power plant, which is already under construction.
The facility will have five storage tanks with a total capacity of 5000 cubic meters of liquefied natural gas.
The regasification unit will be operated by Shell’s unit Gasnor. It will also include a berth for small-scale LNG carriers that will supply the LNG at night, minimising disruption to the neighbouring port, airport and housing estates, the government’s statement shows. According to Shell, LNG will be supplied in 14-day intervals.
There is also potential for LNG bunkering operations in the future, following the appropriate environmental assessments and safeguards.
“Following the recent approval of a robust Environmental Impact Assessment report, construction of the regasification unit is planned to start towards the end of 2016 with commissioning and first delivery of LNG expected to take place ahead of the start-up of the power plant, expected during the second half of 2017,” the statement reads.