French hostility frustrates Spanish gas pipeline dream

Europe’s urgent search for alternatives to Russian gas has caused a standoff across the Pyrenees as a Spanish quest to dig a pipeline through the mountains is thwarted by French skepticism of the project.

Spain is rekindling its ambition to become Western Europe’s new hub for imported gas from beyond the continent as the flow of Russian gas to the region via pipelines such as Nord Stream 1 dwindles.

Key to his hopes is the construction of the MidCat pipeline which could transport 7 billion cubic meters (bcm) of gas per year – around a fifth of Spain’s annual consumption – from Catalonia to south-west France. .

French President Emmanuel Macron expressed France’s opposition to the multimillion-euro project this month, however, saying the argument that MidCat would solve Europe’s gas problems was “factually false”.

Spain’s ability to muster enough allies to defeat French resistance will be decisive in determining the identity of Europe’s new energy guardians, as the continent’s energy map is redrawn amid warnings of rationing and rising household energy bills.

Spain’s Energy Minister Teresa Ribera said the pipeline could not be built to ease Europe’s energy woes this winter, but could be completed by the end of 2023 © John ThysAFP via Getty Images

Teresa Ribera, Spain’s energy and environment minister, said it was premature to cancel the pipeline. She told the Financial Times: “It’s a conversation that goes beyond the bilateral relationship between Spain and France. It’s not about shared infrastructure between two countries. There’s a bigger picture large which must be taken into account.

Spain, which has long lamented being an “energy island” due to its poor connections with France, has Germany’s backing. Europe’s biggest economy badly needs to replace Russian gas and could import fuel from Spain with some improvements to the French network.

Olaf Scholz, the German Chancellor, said last month: “I strongly support this connection.”

The 100 km Spanish section of the MidCat gas pipeline would cost 375 million euros and would be built by Enagás, the national gas network operator, which operates two existing links to France with a capacity of 8.5 billion m3. Paris says the whole project and associated upgrades would cost at least 3 billion euros.

Ribera acknowledged that MidCat could not alleviate the harsh winter expected in Europe this year, but said it could be completed by fall 2023. Paris believes that would take much longer.

Spain argues that MidCat should be paid for with EU funds. Brussels is seeking to move away from funding fossil fuel infrastructure, but Madrid stresses that the pipeline would be ready to transport hydrogen from 2030 – a priority fuel for the EU in the fight against climate change and an area where France and Spain are called upon to compete as producers.

Map showing gas pipeline connections between Spain and France and Algeria/Morocco with Spain

Although Spain is also a force in wind and solar, and Ribera scolded in 2018 the “illusions” of those who thought gas use could continue indefinitely, the war in Ukraine has upset priorities. from Madrid.

The country produces little gas itself, but wants to use billions of euros of infrastructure built since the 1980s. On a daily basis, the Spanish system ingests gas from Algeria, Nigeria, Qatar and the United States – more from Russia – via two pipeline links to North Africa and six facilities that combine liquefied natural gas terminals and plants that transform LNG into gas. State. The 60 billion cubic meters per year that these facilities can process represents a third of the EU’s total regasification capacity, says Enagás.

Last week, as Ribera announced a modest increase in the gas that could be transported through an existing Basque gas pipeline, she said: “We want to contribute, because we can, to the security of supply of Europe and our neighbors”.

Macron disagrees and presents MidCat as a solution in search of a problem. After a meeting with Scholz, he went out of his way to say that France supported the idea of ​​European energy solidarity but dismissed the pipeline as economically and ecologically unfeasible.

“I don’t understand why we would jump like Pyrenean goats on this subject to claim that it would solve the gas problem,” Macron said, paraphrasing a well-known saying of former President Charles De Gaulle.

He added that the two existing gas pipelines were not even fully utilized – capacity utilization was only 53% since February 2022 – and noted that last month France had exported gas to India. Spain. Enagás said that since the start of the war in Ukraine, Spain had exported gas to France around 70% of the days.

Separately, French officials have questioned whether it makes sense to invest in gas infrastructure as the country depends on nuclear power for most of its electricity and needs to invest heavily to catch up on renewables. .

Bar chart of By country, September 2021-August 2022 (%) showing the origin of Spanish gas imports

The MidCat idea has been around for around 15 years, but it appears to have been killed in 2019 when French and Spanish energy regulators said the project did not meet market needs and was too expensive.

However, Arturo Gonzalo Aizpiri, managing director of Enagás, told the FT that the equation had been turned by supply risks and soaring gas prices – currently 12 times higher than three years ago – as well as the EU’s long-term bet on hydrogen.

Teréga, Enagás’ French counterpart, declined to say if it was still interested in the project.

A former senior Spanish government official remains unconvinced, saying it would be more cost-effective to ship LNG to Germany for conversion back to gas at the new floating regasification plants Berlin is acquiring. “MidCat looks a bit like science fiction,” the official said.

Thierry Bros, an energy expert at Sciences Po Paris, said the push for the pipeline had little to do with European solidarity or Ukraine. “The Germans did not properly manage their gas or electricity networks. The Spaniards have built too many LNG terminals,” he said. “I don’t see why French taxpayers should pay for the mistakes made by Spain and Germany.”

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