What is the MidCat, the Spanish gas pipeline that could isolate Putin

Russia’s war in Ukraine promises to be an energy headache for Europe. The European Commission has promised to disassociate itself by the end of the year – as far as possible – from raw materials from Russia and that milestone involves seeking new sources that supply the continent with oil and gas. One of the long-term alternatives on the table is the construction of MidCat, a gas pipeline designed more than a decade ago that would connect Spain and France with the capacity to insufflate in Europe around 5% of the gas that it now imports from Russia.

MidCat is a project that proposes the connection between the gas network of Spain and France through the construction of a section of pipes that would start from Hostalric (Girona) and enter the south of France. This 190-kilometre gas pipeline would make it possible to add a new gas connection between the two countries, which already have two in operation, but which are not capable of sending the necessary flow to supply Europe’s current gas deficit.

Originally -the project began to be devised more than 15 years ago- its objective was to improve the connection of the peninsula with the rest of Europe in terms of gas to put an end to the so-called “energy island” situation, which causes Spain and Portugal to be – together with Malta and Cyprus – the only countries in the Union that cannot live off their pipeline gas supply, but instead need to import liquefied gas transported by ship. This lack of competition has for years been responsible for the gas price gap between France and Spain.

MidCat’s transport capacity at full capacity would be 7,300 million cubic meters per year (or 7.3 bcm, as expressed in the sector) from Spain to France, just over a fifth of the annual gas consumption in Spain , enough to rebalance the Spanish gas market in a normal situation. But now the tables have turned and the purpose of MidCat would not be to optimize the Spanish system, but to save the European one.

Why has MidCat been talked about again?

Russia’s war in Ukraine has caused Western countries to hastily reduce their energy dependency on Vladimir Putin, partly to prevent possible supply cuts, but mainly to nip in the bud Russia’s main source of wealth that serves to the country to finance its military campaign: the export of raw materials.

Russia produces 40% of the gas consumed by the European Union as a whole -155 bcm per year- and the Commission already approved in early March a plan to cut 66% -up to 55 bcm per year- its purchases of this material to Russia by the end of 2022, a historic maneuver that will be carried out by substituting Russian gas for that of other producers.

The United States and Qatar will be some of the big sellers that will cover the Russian quota, with 50 bcm per year, an insufficient amount to forget about Putin’s gas. In addition, the Commission expects to save around 40 bcm each year with renewable energy sources and energy efficiency measures, which will require large investments of all kinds to modernize homes and increase green power generation plants. The remaining 10 bcm are expected to be received through gas pipelines from third countries.

This is where the MidCat connection would come into play, which could irrigate Europe with gas from Algeria, Nigeria or Equatorial Guinea with its capacity to transport 7.3 bcm per year.

So is it going to be built?

In 2019, the MidCat project was parked after the French and Spanish regulators concluded that its construction was not recommended. According to the National Commission of Markets and Competition (CNMC) and the Commission de Régulation de l’Énergie (CRE), the construction of the gas pipeline was too expensive and the transport tariffs would not help improve the Spanish energy ecosystem. This position served the French government to dismiss the idea, which was welcomed by the French atomic lobby, which would have seen its business displaced by gas.

But the new war scenario has caused the main critics of the gas pipeline to moderate their speech and since the beginning of March the rapprochement between the Spanish and French governments has intensified.

Teresa Ribera, the Minister of Ecological Transition, reluctant to build MidCat, recognized at the beginning of March the need to find solutions to Northern Europe’s dependence on Russian gas, and one of these solutions could be the gas connection with France.

The head of the environment, however, stated that this gas pipeline should be financed by Europe as it is a geostrategic project for the region, and that in order to be built it must be designed in the long term within the environmental objectives of the European Union. That is, to transport not only natural gas, but also biomethane and other renewable gases, and green hydrogen in the future.

From the French side, the French ambassador to Spain, Jean-Michel Casa, acknowledged two weeks ago that the French government would be willing to resume talks on the MidCat gas pipeline. “Now the background situation has changed. Should we talk about MidCat now? Let’s talk about MidCat,” he said in an interview with La Vanguardia.

Although Casa added that it is not just an issue to discuss with Spain, since his country does not have enough infrastructure to supply a giant like Germany, with 83 million inhabitants. France should allocate nearly 2,000 million to reinforce its gas network in the south – the old PEG Sud market – to be able to take said gas to Germany or Italy. The latter finds itself in a situation similar to that of Germany, with a dependence on Russian gas of close to 40%.

In any case, Minister Teresa Ribera reiterated at the beginning of the month that the construction of this gas connection would take between four and five years, a long-term project that would not serve to deal with the possible energy shortage that Germany is facing or that the German country reaches its medium-term objective: to get rid of Russian gas by mid-2024. It should be noted that until now Germany imported 55% of its gas from Russia.

Given the numerous doubts that hover over this project, Italy made a move a few days ago and proposed an alternative project so that gas from Spain travels directly to Italy without going through France by sea. “In the absence of real and rapid progress on MidCat, we are also in the pre-feasibility phase of a new offshore gas pipeline from Spain to Italy,” said Marco Alverà, CEO of Snam, the Italian gas manager. As a temporary alternative that responds to the crisis derived from the war, Snam proposes using ships to start that flow of liquefied gas right now. “In the very short term, we are organizing a virtual gas pipeline with a system of small ships to transport LNG from Spain to Panigaglia, where only the smallest ships can unload,” the businessman added.