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The crisis of Ukraine is forcing the European Union to accelerate decision-making to improve its interconnections and guarantee the supply of member countries. Among the projects considered as priority is the mid cat consisting of the construction of a gas pipeline that would connect France and Spain. This infrastructure that was devised 20 years ago, which could turn Spain into a key player for European energy security, which is now demanded by Germany and which collides with France’s plans.
The government of Emmanuel Macron It is not betting on a gas pipeline connecting Germany with the Iberian Peninsula, because it will take years to build and it does not solve the current problem in central Europe. The French consider it faster and cheaper to build regasification terminals in Germany. France has four liquefied natural gas (LNG) regasification terminals and Spain has increased this network to six.
The International Energy Agency (IEA) makes some arguments in his report on France as to why he opposes Midcat. “France considered building new gas pipelines within France and between France and Spain (MidCat and South Transist East Pyrenees projects), but abandoned these plans in the face of expected reductions in gas consumption in France and excess network capacity. None of the projects was included in the latest list of projects of common interest of the European Commission. The average utilization rate of French LNG terminals was 41% in 2019”, exposes the international organization.
France imports 7.8 million cubic meters (bcm) of Russian gas, which represents 20% of its consumption. France consumed 43 bcm of gas in 2021, of which 18.1 bcm are LNG imports. Taking into account that the capacity utilization of its regasification plants is only 41%, France can easily substitute Russian gas, as it has 26 bcm of unused capacity, which is three times the import of Russian gas. France is a much less intensive country than Germany in gas consumption, 30% less per unit of GDP.
Germany urgently wants
Germany considers that the MidCat “would a huge contribution” to relax the tension in a situation like the current one, in which the fear of a supply cut by Russia has been installed in both politics and society. The so-called European ‘economic engine’ is the largest dependent on Russian gas among the European powers.
A risk that the IEA already warned about before the crisis with Russia. “The security of natural gas supply is one of the main concerns of the German Government, and the diversification of gas supplies, including through the direct import of liquefied natural gas (LNG), will be more important. In particular, the increased use of natural gas in electricity generation, especially to meet increased electricity demand, will also increasingly link electricity security with gas security,” he explains in your country report.
Germany depended during 2012 on Russian gas by 35% and, after the opening of the Nord Stream gas pipeline at the end of 2011, this dependency rose from 40%. Germany has to deal with its dependence on Russian natural gas and the inability to turn to other suppliers quickly.
His Government hastened, after Russia’s challenge, to sign long-term gas supply contracts with Qatar. The German energy problem is very serious, it intends to face this winter with the gas reserves it achieves, while looking for alternatives such as Midcat for the winter of 2023.
Germany now, unlike in 2008, asks for help from the southern countries. Another alternative is Italy. Spain’s southern neighbor with a gas pipeline from Turkey and Algeria, with their corresponding regasification ports. Although Italy has a problem exporting gas: it is the second largest consumer of gas in all of Europe. A large part of the gas purchases it makes is kept for its own consumption.
Spain can do business
For this reason, when it comes to moving gas from south to north, the focus is on Spain. The country diversified its gas supply through two entry routes: international gas pipelines and liquefied gas. It is supplied from six international gas pipelines: two with Algeria (one of them closed since November 2021), two with Portugal and two with France.
In addition to having six operational liquefied natural gas (LNG) regasification plants, Portugal adds another regasification plant that can be connected to its network. “The Spanish gas supply diversification model offers an advantageous situation that could contribute to reducing dependence on Russian gas by 10% to the rest of the European Union. For this, it is essential to complete the construction of the MidCat, a gas pipeline that would connect France and Spain through Catalonia”, highlighted the Spanish Institute for Strategic Studies (IEEE)the think tank at the Defense Ministry, in a report.
Thus, Spain would cease to be an energy island for Europe and would become a gas distributor in accordance with its privileged geographical position. On the other hand, the European Union could benefit from Algerian gas. The country has a large network of regasification ports, which allows it to be a multi-supplier and bring ships from anywhere in the world, plus gas from Algeria. An infrastructure that allows it to buy and offer that gas to the rest of Europe if the appropriate interconnections allow it.
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