French hostility frustrates Spain’s gas pipeline dream

Europe’s urgent search for alternatives to Russian gas has provoked a stand-off across the Pyrenees as a Spanish quest to dig a pipeline through the mountains is stymied by French scepticism about the project.

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

Key to its hopes is the construction of the MidCat pipeline that could carry 7bn cubic metres (bcm) of gas per year — equal to roughly one-fifth of Spain’s annual consumption — from Catalonia to south-west France.

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

Whether Spain can assemble enough allies to overcome French resistance will be decisive in determining the identity of Europe’s new energy gatekeepers, as the continent’s power map is redrawn amid rationing warnings and rising household energy bills.

Spain’s energy minister Teresa Ribera
Spain’s energy minister Teresa Ribera says the pipeline could not be built to ease Europe’s energy problems this winter but could be completed by late 2023 © John ThysAFP via Getty Images

Teresa Ribera, Spain’s energy and environment minister, said it was premature to write off the pipeline. She told the Financial Times: “It is a conversation that goes beyond the bilateral relationship between Spain and France. These are not questions of shared infrastructure between two countries. There is a bigger picture that needs to be considered.”

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

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

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

Ribera acknowledged MidCat could not ease the arduous winter expected in Europe this year, but said it could be completed by autumn 2023. Paris believes it would take much longer.

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

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

Although Spain is also a force in wind and solar power, and Ribera in 2018 scolded the “delusions” of those who thought gas use could continue indefinitely, the war in Ukraine has shaken up Madrid’s priorities.

The country produces little gas of its own, but is eager to use billions of euros worth of infrastructure built since the 1980s. On a daily basis the Spanish system ingests gas from Algeria, Nigeria, Qatar and the US — plus some from Russia still — via two pipeline links to north Africa and six facilities that combine liquefied natural gas terminals and plants that turn LNG back into a gaseous state. The 60 bcm per year those facilities can handle accounts for one-third of the EU’s entire regasification capacity, Enagás says.

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

Macron does not agree and casts MidCat as a solution in search of a problem. After a meeting with Scholz, he took pains to say France supported the idea of European energy solidarity but dismissed the pipeline as economically and environmentally unworkable.

“I do not understand why we would jump around like Pyrenees goats on this topic to claim this would solve the gas problem,” Macron said, paraphrasing a well-known saying of former president Charles De Gaulle.

He added that the two existing pipelines were not even being fully utilised — capacity use was only 53 per cent since February 2022 — and noted that last month France had exported gas to Spain. Enagás said that since the start of the war in Ukraine, Spain had exported gas to France on roughly 70 per cent of days.

Separately, French officials have questioned whether it is wise to invest in gas infrastructure when the country relies on nuclear energy for most of its electricity and needs to invest massively to catch up in renewables.

Bar chart of By country, Sep 2021-Aug 2022 (%) showing Origin of Spanish gas imports

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

However, Arturo Gonzalo Aizpiri, Enagás’s chief executive, told the FT the equation had been transformed by supply risks and the surge in the gas price — currently 12 times higher than it was three years ago — as well as the EU’s long-term bet on hydrogen.

Teréga, the French counterpart of Enagás, declined to comment on whether it was still interested in the project.

One former senior Spanish government official remained unconvinced, saying it would be more cost effective to send LNG by ship to Germany to be converted back into gas at new floating regasification plants Berlin is acquiring. “MidCat seems a little 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 correctly manage their gas or electricity networks. The Spanish built too many LNG terminals,” he said. “I don’t see why France taxpayers should pay for mistakes made by Spain and Germany.”


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