Chancellor Olaf Scholz (SPD) is not only relying on the construction of liquid gas terminals and the expansion of renewable energies in order to end dependence on Russian gas imports. At his press conference on Thursday, he also mentioned a project that has been halted but could now be revived: the “Midi-Catalonia Pipeline” (MidCat), which will link Spain and southern France in natural gas transport.
As Scholz went on to explain, he has already held talks with EU Commission President Ursula von der Leyen, his colleagues in Spain and Portugal and French President Emmanuel Macron to give the MidCat project new impetus. The reference to the French head of state is significant in that the project was abandoned in 2019, i.e. during Macron’s tenure. At the time, Paris refused political support for further construction. According to the majority opinion at the time, France did not need the gas from the south because it was supplied by nuclear power.
Specifically, it is a pipeline section with a length of 226 kilometers that would start in Hostalric north of Barcelona and end near Carcassonne in southern France. The problem: Because the pipeline would run across the Pyrenees, the project is expensive. The cost of construction is likely to be more than 440 million euros.
Since the beginning of the Ukraine war, the tide in the discussion about MidCat has turned again in Europe. The search for energy sources beyond the Russian supply began not only in Germany. In Spain, too, there were increasing calls for the resumption of the MidCat project, which would ultimately enable the transport of Algerian gas via the Iberian Peninsula to the north of the EU via the European pipeline network.
However, for political reasons, gas supplies from Algeria to Spain have recently been cut back. Because Madrid Prime Minister Pedro Sanchez supports Algeria’s neighbor Morocco in the dispute over Western Sahara, Algeria froze trade relations with Spain in June. Between August 2021 and July 2022, the share of deliveries from Algeria in Spanish gas imports fell from almost 50 to 29 percent.
Nonetheless, the MidCat pipeline could play an important role in transporting LNG arriving in Spain from the US and Nigeria to northern Europe. Since the Russian aggression against Ukraine, the government in Portugal has also been working on expanding its LNG terminal in Sines.
Positive signals came from Portugal and Spain after Scholz’s announcement that he wanted to advance the pipeline connection between Catalonia and south-west France again. Spain’s Environment and Energy Minister Teresa Ribera said on Friday that the MidCat project, which started in 2013, could be completed in less than a year. The construction period was originally estimated at two years.
Portuguese Prime Minister Antonio Costa had previously said on Twitter: “Germany can rely 100 percent on Portugal’s commitment to the construction of the gas pipeline. Today for natural gas, tomorrow for green hydrogen.” Costa also advocated using the port of Sines as a logistics platform in the meantime to speed up the distribution of liquid gas in Europe.
Spanish MEP Nicolas González Casares tweeted that in 2018, then-EU Energy Commissioner Miguel Arias Canete considered the Spain-France pipeline feasible. “Strangely”, the Spanish and French regulatory authorities classified the project as uneconomical at the beginning of 2019, even though the gas price was low at the time and the EU Commission’s “Green Deal” had not yet been launched. The gas pipeline is without a doubt “a strategic project”. However, it must be ensured that the tube ultimately contributes to decarbonization, he explained.
However, Spain insists that the EU take over the financing of the MidCat section. The government in Madrid had previously built the country’s LNG infrastructure, which includes six terminals, not least with subsidies from Brussels. From a Brussels perspective, the expansion of the pipeline system between Spain and France was a priority for a long time. Until the project was shelved in 2019, MidCat was on a list of priority infrastructure projects designed to drive diversification in energy supply.
The EU now wants to make itself independent of Russian energy with the help of the “RePower EU” strategy. The Commission wants to provide almost 300 billion euros by 2030. The sum should consist largely of loans and grants, some of the money is still available from the Corona Aid Fund decided in 2020. A spokeswoman for the Commission told the Tagesspiegel that it would be in line with the “RePower EU” strategy if Spain and France promoted so-called projects of common interest in the energy sector. However, these Franco-Spanish projects are not about gas, but about shared electricity supply.
As the spokeswoman explained, investments to connect LNG terminals on the Iberian peninsula with the network in the north of the EU must be designed in such a way that hydrogen can also be transported in the future. Scholz also attached importance to this point at his press conference. According to the Chancellor’s idea, pipelines that are currently used for importing liquid gas could in future be available for importing hydrogen.