- Germany and Spain in favor of a gas pipeline project
- France says Pyrenees link is redundant, not green
- Berlin and Madrid plan to bypass France
PARIS/MADRID/BERLIN, Sept 12 (Reuters) – French skepticism over a new gas pipeline across the Pyrenees highlights competing visions of Europe’s future energy mix as the continent urgently faces to an energy crisis.
MidCat would be a third gas connection between France and Spain which, according to its main backers, Madrid, Lisbon and more recently Berlin, would help Europe reduce its dependence on Russian gas.
But French President Emmanuel Macron has bluntly told his partners that he sees no case for the multi-billion euro project.
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France says MidCat would take too long to build to alleviate the looming energy crisis, would be costly for France and run counter to ambitions to transition to a green economy.
Spanish and German officials, speaking on condition of anonymity, told Reuters they believed France was acting to protect its own ailing nuclear industry and fend off competition from Spain as a gas hub imported.
“Macron is under pressure at home from different groups, who do not like the pipeline project, the most important is surely the nuclear energy sector,” said a German government source.
Spokesmen for France’s energy ministry and EDF, which operates France’s nuclear reactors, declined to comment.
Russia supplied 40% of European gas before its invasion of Ukraine. Now the region is striving to diversify its energy sources and MidCat was one of the projects EU ministers discussed at an emergency meeting in Brussels last week.
German Chancellor Olaf Scholz last month described the pipeline as “dramatically absent” from the European grid and raised the issue last week with Macron in a video call.
Immediately afterwards, Macron said there was spare capacity in the pipes already connecting Spain and France and that MidCat could not be built fast enough to alleviate this winter’s crisis.
“I don’t understand what short-term problem that would solve,” Macron said. Read more
But while that may not bring immediate relief, Spain and Portugal say they have a solution with new gas routes and Madrid have said they are ready to persuade Macron over MidCat.
Both have large gas import capacity, with seven LNG terminals converting tankers back from liquefied natural gas (LNG) to steam for use by industry and households if the infrastructure was in place to qu it is routed to other countries such as Germany via France.
The French president has said he’s not making all the fuss over MidCat, telling reporters last week: “I don’t understand why we would jump like goats from the Pyrenees on this subject.”
This has led officials in Madrid to wonder whether Macron might ask for something in return, be it EU funding or support for another project. And despite Macron’s statements, French officials have left the door ajar for further talks.
But in a sign of Spanish frustration, a source said France needed to demonstrate how it was contributing to European ‘energy solidarity’, given that half of its nuclear reactors are offline and it relies on others for power. ‘supply electricity.
Macron, however, said the plan to reactivate a disused interconnector in eastern France so that Paris can ship its own gas directly to Germany if needed is proof of his commitment.
It will enable France to supply Germany with up to 20 terawatt hours (TWh) of gas during the winter, or around 2% of the gas needs of Europe’s leading economy. A German official said the deal would not solve Germany’s crisis, but sent a message to markets. Read more
A joint proposal for a new trans-Pyrenees gas pipeline that would have a capacity of more than double the volume of gas transported between Spain and France was rejected by energy regulators in both countries in 2019.
The project was proposed by Terega, a gas network company partly owned by Italy’s Snam (SRG.MI) and EDF (EDF.PA), and its Spanish counterpart Enagas (ENAG.MC) for an estimated cost of 3 billion euros.
While the French regulator said the economic benefits would be directed towards Spain, Madrid says Russian moves to cut gas supplies mean MidCat’s benefit would now extend well beyond Spain’s borders.
However, France has terminals on its Atlantic and English Channel shores and it too wants a share of LNG imports.
“France has (LNG terminals) that can handle gas for all of Europe,” a French government source said.
But in the longer term, France is betting heavily on reviving its struggling nuclear industry in its quest for carbon neutrality, and Paris has questioned MidCat’s green credentials.
It would take at least the end of the decade before MidCat was finished, according to officials from the French Ministry of Energy.
“At this point, the priority will be to decarbonise the economy, not to use more gas, so we are somewhat perplexed,” a ministry official told Reuters.
Berlin’s main interest in MidCat is green hydrogen rather than short-term LNG supply, two senior German officials told Reuters.
Officials in Madrid and Berlin say the pipeline could be reused to transport zero-emission hydrogen made in the Sahara Desert or elsewhere to the industrial heartland of Europe.
But France prefers to produce hydrogen locally rather than relying on imports. And he doubts the near-term feasibility, a French government source said, of Germany’s vision for hydrogen, which is notoriously harder to transport than natural gas.
Faced with French resistance, Madrid and Berlin are exploring alternatives. Plan B could completely bypass France and build a pipeline under the Mediterranean to Italy.
Madrid is accelerating a feasibility study for a pipeline from Barcelona to Livorno on the Tuscan coast. A Spanish official said construction would take longer, but he had political support from the outgoing Italian government.
A senior official in Spain’s autonomous region of Catalonia, a supporter of MidCat, said an undersea pipeline to Italy would be more expensive and carry greater environmental and other risks.
One issue is the flammability of hydrogen, which also leaks more easily than gas because its molecules are smaller, while it can also make some grades of steel brittle, the official said.
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Reporting by Michel Rose and Elizabeth Pineau in Paris, Andreas Rinke in Berlin, Belen Carreno in Madrid and Joan Faus in Barcelona; Written by Michel Rose; Editing by Richard Lough and Alexander Smith
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