Econostrum | Economic News in the Mediterranean

Spain and Portugal support a gas pipeline project between the Iberian Peninsula and Central Europe

Written by Frédéric Dubessy on Thursday, August 18th 2022 à 10:00 | Read 596 times

SPAIN / PORTUGAL. The possibility of building a gas pipeline across the Pyrenees to link Spain to Central Europe is appealing to the leaders of the Iberian Peninsula. "The Spanish government has been calling for this and asking Europe for a long time now (...) We hope that this dream will soon become a reality," said Pedro Sánchez on Tuesday 16 August 2022 during a visit to the island of La Palma (Canary Islands). The President of the Spanish government was reacting to a statement by Olaf Scholz on Friday 12 August 2022, when he said that an interconnection between his country and the Iberian Peninsula was "dramatically lacking in Europe". In a speech, the German chancellor referred to this infrastructure, which "would make a major contribution today to relieving and easing the supply situation".

Germany is one of the countries most dependent on Russian gas imports (compromised since the invasion of Ukraine). This project, for the moment reduced to an idea on paper, is now on the long list of alternatives. "Spain has a lot to offer Europe to reduce its energy dependence on Russia, thanks to our huge regasification capacity," says Pedro Sánchez.

His country has six terminals equipped to transform imported gas - by sea in LNG tankers - into liquefied natural gas (LNG). This operation then makes it easier to transport the gas by injecting it into the Spanish network or by exporting it, notably to France, thanks to two connections located in the Basque Country. However, these connections are of limited capacity. In the short term, "in two to three months", Teresa Ribera assures us that her country would then be able to "supply between 2 and 2.5% of the gas that can be consumed throughout the EU". Spain's Minister for Ecological Transition, she said that it would be enough to put "an additional compressor" on the two facilities in the Basque Country.

Portugal wants to help Europe become energy self-sufficient

The MidCat gas pipeline project between Spain and France could be relaunched (photo: DR)
The MidCat gas pipeline project between Spain and France could be relaunched (photo: DR)
A gas pipeline from central Europe to the Iberian Peninsula would improve this interconnection and benefit all the regions it crosses. As well as Portugal. Antonio Costa also jumped at Berlin's proposal. According to the Portuguese Prime Minister, this gas pipeline is "a priority" for his country. He was delighted with Olaf Scholz's words, which "increase the pressure on the European institutions" to put this dossier at the top of the pile. Like his Spanish counterpart, Antonio Costa said that "Portugal can play an important role" in helping Europe become "energy self-sufficient".

Portugal does have a gas terminal in its deep-water port of Sines (100 km south of Lisbon).

This project could also revive the aborted project for a gas pipeline between Spanish Catalonia and south-eastern France (from Hostalric to Barbaira), which would become a link in the chain. Called MidCat and supported by the European Union, it was launched in 2013 at an estimated cost of €440m. Despite an attempt to resume work, which was confirmed by the signing of an agreement in March 2015, the project was definitively abandoned in 2019. This was mainly for reasons of structuring the financial package, but also for environmental reasons.

Eight to nine months to relaunch MidCat

A cost-benefit report commissioned from a Finnish consultancy and funded by the EU - which was to remain secret but whose findings leaked in April 2018 - stated that "the project may have an economic interest, but only in the presence of a combination of three specific factors: low levels of gas demand in Europe, restricted access to Algerian gas and an increase in the price of liquefied natural gas".

According to Teresa Ribera, the owner and manager of the gas network, Enagás, estimates that it will take "approximately eight to nine months" to bring such a pipe into operation on the Spanish side, and says it is ready to invest €370 million (if the EU gives the green light) for the project. Indeed, there are still about a hundred kilometres (and as many on the French side) to be built to complete this section and reach the French border. It should be noted that MidCat, according to the minister, should have a lifespan of thirty to fifty years, before its pipes are converted to accommodate renewable hydrogen.

What remains is the involvement of the French side, which would then have to take over the task of transporting this gas to the centre of Europe. And that is where the problem lies. The French Ministry of Energy Transition announced on Friday 12 August 2021 that "such a project would in any case take many years to become operational", and peremptorily stated that "it would therefore not respond to the current crisis".

Read also: The Eastern Mediterranean becomes a new gas province

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