Gas pipelines, energy supply and interconnection on the border between France and Spain: lessons from two failures

The supply of natural gas and the European gas interconnection have been in the forefront since the Russian invasion of Ukraine.

If natural gas imports from Russia are completely suspended, a new energy scenario could open up in Europe, favorable for Spain, since it has the largest liquefied natural gas (LNG) regasification capacity in the entire EU and two operational gas pipelines with Algeria .

But, to supply Europe with gas from Spain, it would also be essential to increase the interconnection capacity of the Spanish network with Europe, now limited to the double interconnection of Larrau and Irún, in the western Pyrenees, with France. In this context, the MidCat gas pipeline, abandoned in 2019, could be retaken.

Already between 1959 and 1971, there were projects to build a Franco-Spanish gas pipeline that also failed. In this article we will examine the reasons.

Transnational gas pipelines and energy supply

The construction of gas pipelines, especially transnational ones, requires the combination and balance of a host of economic and geostrategic factors, and a long-term vision and commitment between the countries and governments involved.

The facts

• The energy mix of the affected countries and their sources and supply routes.
• The relative prices of available energies and the availability of capital for investment and its cost.

geopolitical variables

• Foreign relations, not only between the countries through which the gas pipeline passes but also with third countries and the global geopolitical context.
• The general vision of governments on what are the economic and geopolitical interests of their countries.

The economic factor

In addition, there is the relative price of gas, a very important variable (especially now that it is a key in the energy transition), because a substantial variation can alter cost-benefit analyzes and drive or park investment decisions, but geopolitical variables can alter those scenarios. The Russian invasion of Ukraine changed the long period of good relations between Russia and Germanyabout which the Nord Stream gas pipelines had been developed 1 and 2. This fact has had two key consequences for Europe:

• It has contributed to raising the price of natural gas on the international market.
• It has led the EU to rethink your alternatives of gas supply and their infrastructure investment decisions.

In a closer case, the growing conflicts between Algeria and Morocco they caused the closure (at the end of 2021) of the Maghreb-Europe (GME) gas pipeline and a diplomatic crisis between Algeria and Spain, which has chosen to change its gas supply sources.

The MidCat pipeline

The Midcat projectwith an initial investment of 3.1 billion euros, sought to improve gas connections on the Iberian Peninsula (a energy island), with Europe. 235 kilometers of pipes would depart from Martorell (where the Medgaz gas pipeline ends) to transport 7,500 million cubic meters of gas.

The works began in 2010 but were stopped the following year, just 100 kilometers from the border, due to the lack of interest from France. In 2013, Spain managed to get the MidCat on the list of EU projects of common interest (with an estimated investment of 470 million euros).

In 2019 the regulatory bodies of France and Spain works stopped again due to the high cost of the infrastructure and the existence of the Larrau-Irún connection. In 2021, the natural gas imported through this connection, 30,905 GWh, represented 7% of gas inflows into the Spanish system, while exports were 13,776 GWh, that is, less than half.

In addition to technical considerations, there was a intense environmental mobilization against the project in the Catalan autonomous community and also in France (but to a lesser extent).

The turn of the Spanish Government in the Sahara issue and its consequences on the supply of Algerian gas may alter the role of Spain in the supply of natural gas to Europe by pipeline, for the benefit of Italy. This would reduce the expectations of using the MidCat. In addition, the total amount of gas that could be transported to Europe through the two existing Pyrenean interconnections, some 18 billion cubic metres, is well below Europe’s energy needs estimated today at around 500 billion cubic metres.

On the other hand, the EU has set itself a deadline 2050 to be climate neutral (zero emissions) so any investment in gas infrastructure must be consistent with this short amortization period.

The Franco-Spanish gas pipeline through Irún, 1959-1971

The MidCat gas pipeline is not the first transnational energy infrastructure that has not been carried out between France and Spain. That’s how we tell it in the book Nortegas (1845-2021). History of the gas industry in northern Spain (Jesús M. Valdaliso, Carlos Alvarado and Patricia Suárez; forthcoming publication, Marcial Pons, Madrid, 2022).

In 1959, when coal predominated in the energy mix and, to a lesser extent, oil, the possibility of building a gas pipeline connecting the Lacq natural gas fieldin the southwest of France, with the Cantabrian coast through Irun.

The initiative came from the French, interested in finding new consumers. The gas pipeline would start at the Bayonne terminal to reach Irún, from where it would be distributed through another gas pipeline (which the French offered to build) to Bilbao, to the gas factories in the north of Spain and to the large industrial consumers located in that region.

In September 1959, the Bilbao press published: “Soon we will consume the Lacq gas”. However, the project did not come to fruition, especially due to the fierce opposition of the Asturian miners and the National Coal Union, for whom the gas pipeline meant the loss of their best market and the definitive death of a sector already in decline due to oil introduction.

This political factor, together with the economic context of the country, embarked on the Stabilization Plan of 1959made the Spanish government not bet on the gas pipeline.

In 1968 an attempt was made to reactivate the project by businessmen and banks in the Basque Country, leading to the development of a network project, an organization chart for the distribution company as well as an investment plan, but again the initiative did not come to fruition, this time by:

• The reticence of the gas company and the French government.
• The counterparts demanded from the Spanish government, which was very focused on the oil industry.
• The Spanish energy mix, more based on oil, with a low penetration of natural gas in the market, an energy hardly known in Spain in those years.
• The existence of an alternative supply of natural gas in Spain through the Barcelona regasification plant.

It was in 1993 when it was produced the first Franco-Spanish gas interconnection, between the Lacq field (already in clear decline) and the Barcelona-Bilbao gas pipeline through the Navarran port of Larrau. Thirteen years later it entered service Euskadour gas pipelinelinking the Bahía Bizkaia Gas regasification plant with the Lussagnet underground storage, one of the largest in Europe.

Lessons from two failures

Energy interconnections between markets and countries are always good because:

• They favor greater flexibility in the management of regional systems.
• They create new alternatives and supply routes.
• They make it possible to take advantage of complementarities of production and demand, frequent for climatological reasons, of the production mix between countries, latitudes and markets.

But its very high cost and the problem of aligning the not always common interests of the countries involved, among other factors, mean that not all the projects become a reality, as we have seen.

Although the MidCat project and the Lacq-Irún interconnection project arose in very different phases of the life cycle of the natural gas industry, their failure is due to reasons that have to do with the economy, politics and the interests of the countries involved. .

In both cases, the availability of a regular supply of fuel (gas and oil, respectively) at low prices reduced strategic interest and profitability expectations.

Furthermore, none of the projects aroused sufficient interest and enthusiasm in the governments of the affected countries. The reasons have been economic as well as political and geostrategic.

The mid-20th century Basque-French gas pipeline was opposed by the opposition of interest groups linked to competing energies (coal and oil), the existence of a regular supply of imported oil at low prices, and the boost given to this energy by the Spanish governments of Francoist developmentalism.

The MidCat came face to face with the high weight of nuclear energy in the French energy mix and the existence of a regular supply of gas to Spain from Algeria, as well as against the intense environmental mobilization before the project. Finally, the existence of previous gas infrastructures (the Barcelona regasification plant in the first case or the connection of the western Pyrenees in the second), pending amortization and/or with a low utilization capacity, ended up motivating the file definitive of both projects.

However, history shows that, in extraordinary situations, economic (or environmental) considerations are subordinated to other more urgent and compelling ones, such as war or the guarantee of energy supply. It is in this context that the abandoned MidCat project has returned to the European public agenda.