France-Spain Gas Interconnector Blocked Again

---

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--A key section of a planned gas interconnector between France and Spain has been blocked by regulators, but the European Commission (EC) has announced that it will continue to support the project.

Permission for the central portion of the MidCat interconnector, the South Transit Eastern Pyrenees (STEP), was rejected by the French and Spanish energy regulators last month, on the basis that it was not necessary and will cost too much.

French regulator CRE and its counterpart in Spain, CNMC, stated: "On 17 January 2019, the French and Spanish regulatory authorities jointly rejected the investment application presented by Teréga and Enagás. CRE and CNMC consider that the STEP project does not meet the needs of the market and does not have sufficient maturity to be able to be the subject of a favourable decision by the regulators."

MidCat is a projected gas pipeline that would help deliver gas from Algeria through the regions of the French Midi Pyrenees and Spain's Catalonia (MidCat). The overall project is estimated to cost 3.1 billion euro ($3.6 billion), with France paying the larger share. The STEP section will cost 441 million euro ($505 million)--290 million euro ($332 million) on the French part and 151 million euro ($173 million) on the Spanish side. The first 87-kilometre stretch of the gas pipeline--Martorell to Hostalric--was carried out in 2012 in Spain but halted when France decided not to support it. The project was expected to resume this year, but the regulators' rejection is another serious blow.

"The STEP project remains a project of common interest and can continue benefitting from EU support, in particular for further assessments," Anna-Kaisa Itkonen, the EU spokesperson in charge of climate action and energy, told Euractiv. "The Commission has continuously supported the better integration of the Iberian Peninsula in the EU internal energy market, including through new electricity and gas interconnections."

Opponents of the project want the EC to pull MidCat from its list of priority energy infrastructure projects--Projects of Common Interest (PCI)--that can avail of significant EU funding. Last year a study by Poyry, a consultancy appointed to assess the first phase of Midcat for the EC, found that the project may not be economically viable, claiming it would only be financially viable if LNG supplies were tight.

The MidCat project will more than double the capacity of gas transport in France and Spain, adding 7.5 billion cubic metres. It will require the installation of approximately 1,250 kilometers (km) of pipes, including 800 km in France and 450 km in Spain. It will also need two new compression stations with a total power of 46 megawatts and the enlargement of two existing compression stations.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.