France, Spain and Portugal agree to build the Barcelona-Marseille gas pipeline

MADRID/BRUSSELS, Oct 20 (Reuters) – Spain, Portugal and France said on Thursday they would build a maritime gas pipeline to transport hydrogen and gas between Barcelona and Marseille, replacing plans to expand of the so-called MidCat gas pipeline through the Pyrenees which France opposes.

The road, dubbed BarMar, will primarily be used to pump green hydrogen and other renewable gases, but will also temporarily transport a “limited quantity” of natural gas to help ease Europe’s energy crisis, said said Portuguese Prime Minister Antonio Costa.

Europe is scrambling to secure alternative energy supplies in the face of pressure from Russia, which gradually cut gas flows after the West imposed sanctions in response to Russia’s invasion of Ukraine in late February.

The pipeline “is a response to calls for solidarity from our European partners in the face of blackmail by (Russian President Vladimir) Putin,” Spanish Prime Minister Pedro Sanchez told reporters in Brussels, where the three leaders met on Thursday.

French President Emmanuel Macron said it was “imperative that Europe remains united”.

The BarMar resolves a standoff between Spain and Portugal, who wanted to expand the MidCat pipeline so they can sell gas to central Europe, and France, which argued that building the pipeline would take too long to resolve. short-term supply problems. .

“It’s good news, one of the oldest blockades in Europe has been overcome,” Costa said.

Spain and France have also agreed to accelerate an electricity interconnection across the Bay of Biscay and to identify and work on other connections between the two national grids, according to a joint statement.

The leaders of the three countries have agreed to meet again in Alicante, Spain, on December 9 to decide on a construction schedule and its financing.

Faced with resistance from France, Spain and Italy had previously raised the idea of ​​building an undersea pipeline between the two countries.

In the meantime, he was pushing for France to accept the MidCat project, which would have required the construction of 100 km (62 miles) of pipeline to the French border.

Spain had argued that the pipeline extension could be completed in less than a year while France said it expected construction to take several years.

Spain accounted for 20% of global green hydrogen investment announcements in the first quarter of 2022, second only to the United States, according to consultancy Wood Mackenzie.

Iberdrola, which is building Europe’s largest green hydrogen plant in Puertollano, central Spain, declined to comment on the pipeline announcement.

Among the Spanish companies developing green hydrogen is the oil and gas group Cepsa, which will spend 7 to 8 billion euros ($7.8 to 8.9 billion) to redirect its activities towards energy sources at low carbon emissions by 2030.

Cepsa CEO Maarten Wetselsaar told Reuters the deal puts Spain at the heart of Europe’s plan to diversify away from Russian energy. “Spain and Cepsa can become central players in the future European hydrogen market, ensuring both energy transition and energy security,” he said.

As for natural gas, Spain has six terminals allowing it to bring in liquefied natural gas and convert it into its gaseous form, and three storage facilities, while Portugal has one.

They are all close to capacity, as demand from gas consumers on the Iberian Peninsula was lower than expected due to an unusually warm autumn.

Spain has the largest regasification capacity in the European Union, accounting for 33% of all LNG and 44% of LNG storage capacity. The United States and Nigeria are among the main suppliers of LNG to Spain, which also receives piped gas from Algeria.

Gas prices in the Iberian Peninsula have fallen to their lowest level in nearly six months as storage terminals are full and they lack the pipeline infrastructure to get it to other parts of the country. Central Europe where there is demand.

Countries like Germany that have historically been more exposed to Russian imports are looking for multiple solutions to fill the hole left by Russia’s decision to limit supply.

Germany received the first direct gas deliveries from France on Thursday via a pipeline link as part of an agreement to help the two countries deal with current energy supply problems, the operator said. French network GRTgaz.

France, which is less exposed to Russian imports than its eastern neighbor since most of its needs are met from Norway and by LNG deliveries, will initially supply 31 gigawatt hours per day, using a gas pipeline in the region of the Moselle, indicated GRTgaz.

Reporting by Emma Pinedo, Belen Carreño, Inti Landauro and David Latona; Additional reporting by Benjamin Mallet and Marwa Rashad; written by Charlie Devereux; edited by Andrei Khalip and William Maclean

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