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France, Spain and Portugal agree to build Barcelona-Marseille gas pipeline

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MADRID/BRUSSELS, October 20 (Reuters) – Spain, Portugal and France said on Thursday they will build a sea-based pipeline to transport hydrogen and gas between Barcelona and Marseille, replacing plans to extend the MidCat pipeline across the Pyrenees. France opposed.

Portuguese Prime Minister Antonio Costa said the route, dubbed BarMar, will be used mainly to pump green hydrogen and other renewable gases, but will temporarily allow the transport of “limited quantities” of natural gas to help alleviate Europe’s energy crisis.

Europe is scrambling to secure alternative energy sources in the face of a squeeze from Russia, which has gradually cut off gas flows after the West imposed sanctions in response to Russia’s invasion of Ukraine in late February.

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The pipeline is “a response to calls for solidarity from our European partners in the face of the blackmail of (Russian President Vladimir) Putin,” Spanish Prime Minister Pedro Sanchez told reporters in Brussels, where the three leaders met on Thursday.

French President Emmanuel Macron said it was “obligatory for Europe to stay united”.

BarMar is resolving a dispute between Spain and Portugal, which want to extend the MidCat pipeline so it can sell gas to Central Europe, and France, which argues that construction of the pipeline will take too long to resolve short-term supply issues. .

“This is good news, one of Europe’s oldest blockades has been overcome,” Costa said. Said.

According to a joint statement, Spain and France also agreed to accelerate an electricity interconnection over the Bay of Biscay and to identify and work on other connections between the two national grids.

BarMar, a new pipeline project to connect France and Spain

The leaders of the three countries agreed to meet again on December 9 in Alicante, Spain, to decide on a construction schedule and how it will be financed.

Against the resistance of France, Spain and Italy, he had previously put forward the idea of ​​building an underwater pipeline between the two countries.

Meanwhile, France was pushing to accept the MidCat project, which would require the construction of a 100 km (62 mi) pipeline to the French border.

Spain argued that the extension of the pipeline could be completed in less than a year, while France said it expects construction to take several years.

According to consultancy Wood Mackenzie, Spain accounted for 20% of global investment announcements in green hydrogen in the first quarter of 2022, second only to the United States.

Iberdrola, which is building Europe’s largest green hydrogen plant in Puertollano in central Spain, declined to comment on the pipeline announcement.

Among the Spanish companies developing green hydrogen is the oil and gas group Cepsa, which will spend 7-8 billion euros ($7.8-8.9 billion) by 2030 to shift its business to low-carbon energy sources.

Cepsa CEO Maarten Wetselsaar told Reuters the deal puts Spain at the center of Europe’s plan to move away from Russian energy. “Spain and Cepsa could also be central players in the future EU hydrogen market, ensuring energy transition and energy security,” he said.

As for natural gas, Spain has six terminals and three storage facilities that allow liquefied natural gas to be brought in and converted into gas, while Portugal has one.

All are close to full capacity as consumer demand for natural gas in the Iberian peninsula is lower than expected due to a warm unseasonal autumn.

Spain has the largest regasification capacity in the European Union, accounting for 33% of all LNG and 44% of LNG storage capacity. The USA and Nigeria are among the important LNG suppliers of Spain, which also buys piped gas from Algeria.

Gas prices in the Iberian peninsula have dropped to almost six-month lows as storage terminals are full and lack the pipeline infrastructure to send them to other parts of Central Europe where demand is.

Countries that have historically been more exposed to Russian imports, such as Germany, are seeking multiple solutions to bridge the gap left by Russia’s decision to limit supply.

French grid operator GRTgaz said on Thursday that Germany has received its first direct delivery of gas from France via a pipeline connection, under an agreement aimed at helping both countries deal with current energy supply problems.

GRTgaz said France, which is less exposed to Russian imports than its eastern neighbor as most of its needs are met from Norway and through LNG deliveries, will initially deliver 31 gigawatt-hours per day using a pipeline in the Moselle region.

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reporting by Emma Pinedo, Belen Carreño, Inti Landauro and David Latona; Additional reports by Benjamin Mallet and Marwa Rashad; Writing by Charlie Devereux; Editing by Andrei Khalip and William Maclean

Our Standards: Thomson Reuters Trust Principles.

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