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The Pyrenees pipeline: Germany and Spain do not give up, but France resists

2022-10-06 18:17:30Biznes SHKRUAR NGA REDAKSIA VOX
The Pyrenees pipeline: Germany and Spain do not give up, but France resists
LNG terminal in Bilbao

Berlin and Madrid want the construction of the MidCat pipeline to continue, while France resists. The completion of the gas pipeline is one of the main topics in the high-level German-Spanish meeting.

Germany and Spain do not give up. The governments of both countries are increasing the pressure to convince France that the completion of the construction of a South-North European gas pipeline passing through the Pyrenees is important. Until now, French President Emmanuel Macron has opposed the project, saying that it is not worth it both economically and from the point of view of environmental politics. The 300-kilometer-long pipeline, whose construction has been suspended since 2019, would transport the bulk of Spanish gas plants to Central Europe.

"The pipeline would contribute a lot to calming the situation in the gas supply," says German Chancellor Olaf Scholz, when demanding the continuation of the construction of the pipeline. "Berlin and Spain are of the same opinion, that we need more European energy networks, either for gas or for electricity," Madrid's diplomats also emphasize.

The Midcat pipeline was at the center of the agenda of the high-level German-Spanish government meeting on Wednesday (5.10) in the Spanish city of A Coruñ on the Atlantic. Not far from the city, in the port of Mugardos, there is one of the six gas terminals that Spain has - while Germany has had none so far.

Giant tankers filled with liquefied gas, which in the case of Spain come mainly from the USA, Algeria and Nigeria, are connected to this terminal. In plants, liquid gas, which in English is called "liquefied natural gas" or LNG for short, turns back into gas.

In 2023 Spain will start work on one of the gas terminals in the Atlantic port, in the northern Spanish city of Gijón. According to data from operator Enagas, 100 tankers can be processed annually in Gijón alone, whose LNG cargo corresponds to eight billion cubic meters of natural gas – almost 15 percent of the amount that previously came to Germany from Russia via the Nordstream pipeline 1.

The Pyrenees pipeline: Germany and Spain do not give up, but France resists
German-Spanish government consultations, 5 October 2022

Almost  a third of Europe's LNG terminals are located in Spain

"We own the largest liquefied gas infrastructure in Europe," says Spanish Prime Minister Pedro Sánchez proudly. Spain has 30 percent of all capacities located within the EU. Spain offers Germany and all other European countries that have problems with gas supply to use these capacities, because the Spanish plants are not used enough.

"We want to contribute to increasing Europe's security of gas supply," says Spanish Energy Minister Teresa Ribera. Prime Minister Sánchez even thinks of turning his country into the European gateway for LNG: "Spain has the chance to return to the export market of liquefied gas, becoming an opportunity to replace Russian gas for many EU countries."

That sounds tempting. But in practice there are some problems to solve. For example: How would gas come from Spanish terminals to Central Europe? Because with the departure of France, the plans for the complete construction of the South-North gas pipeline from Spain to France and its connection with the European gas networks have progressed a little.

Macron remains skeptical

"We don't need any more gas connections," French President Macron said after a conversation with German Chancellor Scholz in September. Two small gas pipelines that already exist between Spain and France have not been used even now, months after the outbreak of Russia's war against Ukraine and the resulting gas shortages. In addition, it would take time to complete the construction of the new gas pipeline that would pass through the Pyrenees.

In short: The idea, that MidCat could solve in a short time the current problems that Europe has with gas supply, is "completely wrong", declared Macron. "I don't understand why we have to come around this topic like the goats of the Pyrenees." However, Macron shows willingness to engage in dialogue. Neither German Chancellor Scholz nor Spanish Prime Minister Sánchez have so far been able to convince Macron about MidCat. But, if there will be new arguments, he is ready to rethink his view.

So the door to reach an agreement is not completely closed. Or as Spanish Energy Minister Ribera says: "MidCat is not buried." It will be interesting to see what arguments Berlin and Madrid will use to overcome the obstacles raised by Paris.

The Pyrenees pipeline: Germany and Spain do not give up, but France resists
Macron is not convinced about MidCat

The prospect of liquid hydrogen to get money from Brussels

Perhaps with the argument being used more and more, that the MidCat build can be profitable regardless of gas? For example for the ecological future of the pipeline, not transporting fossil fuels through pipes, but liquid hydrogen - the prospect of liquid hydrogen could facilitate the multi-billion MidCat project with EU subsidies. Or with the idea that is being said loudly in Madrid, that in case of need, instead of France, the connection could be established with the Mediterranean neighbor, Italy.

Construction of the 300-kilometer-long MidCat, from Martirelli in northern Spain to Barbairan in southern France, began in 2013. Engineers laid 86 kilometers of pipes on the Spanish side. Then the construction was stopped in 2019, because Paris but also Madrid and Brussels began to have doubts about its economic efficiency, until the war in Ukraine brought the frozen project back on the agenda./ DW

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