Project Connecting Spain-France Gas Pipeline
Suspended for 20 Years Due to Economic Issues, Recently Resurfaced
German Chancellor Scholz "Already Discussed with EU Commission President"
[Asia Economy Reporter Byunghee Park] Amid the energy crisis in Europe caused by Russia's reduction of gas supplies, the plan to supply gas from North Africa's Algeria through Western Europe, including Spain and France, is resurfacing.
According to major foreign media, German Chancellor Olaf Scholz stated at a press conference on the 11th (local time) that he supports the plan to build a new gas pipeline connecting Central Europe via Spain and France. Chancellor Scholz revealed that he has already discussed the plan with the leaders of France, Spain, Portugal, and Ursula von der Leyen, President of the European Union (EU) Commission.
Scholz said, "I strongly insisted that the new gas pipeline construction plan must be promoted," adding, "A new gas pipeline connecting North Africa and Europe will help diversify Europe's energy sources."
The idea of supplying North African gas to Germany, Poland, and other countries through Spain and France has been proposed for nearly 20 years.
AFP also reported in May that "due to the Ukraine war, the MidCat gas pipeline plan conceived by France and Spain is being reconsidered," noting that "the MidCat gas pipeline construction plan was first proposed in 2003."
MidCat is an abbreviation for Midi-Catalonia, a project to build a gas pipeline connecting Spain and France through the Catalonia region. Because Russia has long threatened Europe by intermittently shutting off gas pipelines, Europe has been considering importing gas from North Africa for some time.
After Russia annexed the Crimean Peninsula in 2014, a project was promoted to build a 190 km gas pipeline connecting Hostalric in northern Spain and Barbaira in southern France.
However, in January 2019, the energy regulatory authorities of France and Spain issued a joint statement halting the pipeline construction plan. The reasons cited were that it did not align with the EU's long-term energy policy to reduce carbon emissions and that its economic feasibility was uncertain.
However, following the Ukraine war, Russia significantly reduced gas supplies, and relations between Russia and Europe deteriorated to an unprecedented level, making it difficult to expect gas trade between Russia and Europe to resume as before. As a result, the MidCat gas pipeline plan is being reconsidered. If the pipeline connects Spain and France, Algeria's gas can be supplied to Central European countries such as Germany and Poland.
Algeria, Africa's largest gas exporter, has been supplying gas to Spain since 1996 through the 'Gaz Maghreb Europe (GME)' pipeline passing through the Mediterranean. Algeria also supplies gas to Portugal and Italy.
Thanks to Algeria, Spain and Portugal have a remarkably low dependence on Russian gas, about 10%, compared to other European countries. Spain imports 50% of its required gas from Algeria. Once the pipeline is constructed, Spain, which will serve as a gateway, is expected to gain some economic benefits.
Chancellor Scholz did not mention specific details regarding the new gas pipeline construction plan. It appears to be at an early discussion stage, still at the proposal level. However, Scholz said that Spain and Portugal are urging France to build the gas pipeline. Spain is reportedly insisting that the EU Commission should provide funding for the pipeline construction.
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