European Union officials remain skeptical about the benefits of a proposed gas pipeline connecting the Iberian Peninsula with the rest of Europe, despite the risk of further cut-offs by Russia.
(Bloomberg) — European Union officials remain skeptical about the benefits of a proposed gas pipeline connecting the Iberian Peninsula with the rest of Europe, despite the risk of further cut-offs by Russia.
The European Commission, the EU’s executive arm, considers that technical assessments show the new infrastructure would achieve no benefits and could take up to seven years to complete, according to an EU official who declined to be named on a confidential issue.
The Midcat pipeline project, which would connect Spain and France through the Pyrenees, was abandoned in 2019. Spanish Prime Minister Pedro Sanchez revived the plan after Russia’s invasion of Ukraine to maximize use of the country’s terminals to process liquefied natural gas imported from third countries.
Europe is considering various measures to intervene in the energy market, including price caps, reducing power demand and windfall taxes on energy companies as surging prices threaten the economy and push households toward poverty. Thirteen EU states have already been affected by Russia’s gas supply cuts.
A spokesperson for the commission did not respond to a request for comment.
The commission will soon carry out a study on future infrastructure options linking the Iberian Peninsula to central Europe, including a possible Spain-Italy link, another EU official said. Results of a first feasibility study by the project’s promoter, Italy’s gas network company SNAM SpA, are expected later this year, the official added.
German Support
Germany, whose Russian gas imports amounted to 55% before the war, has supported the Midcat project. But France remains unconvinced about the pipeline as it considers that the 3 billion euros ($3 billion) it would have to pay would not address current needs, nor help meet the EU’s green targets.
A technical analysis concluded that the new pipeline wold bring no benefits, even if bottlenecks in the French system were overcome to enable gas flows to Germany and central Europe. Gas flows would face additional barriers, due to a different gas composition requiring new facilities at the Franco-German border.
The EU’s green objectives to reduce dependency from fossil fuels have excluded gas projects from the Commission’s priority list, with gas now labeled a transitional fuel.
Renewable Hydrogen
The technical assessment however did not consider the potential for transporting renewable hydrogen from the Iberian Peninsula, which Spain says is needed.
RepowerEU, the Commission’s plan to reduce its dependency from Russian gas presented last May, noted that new investments to connect LNG terminals in the Iberian peninsula with the rest of Europe through hydrogen-ready infrastructure could help to diversify gas supply and exploit the potential for renewable hydrogen.
If the Midcat projects fails to move forward, Spain is pushing for a gas pipeline with Italy that would connect Barcelona and Livorno. This project could turn out to be more attractive in a cost-benefit analysis, an EU official said.
(Updates with comment from official in sixth paragraph)
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