MidCat pipeline: Is the French dilemma worsening Europe's gas crisis?

Spain and Germany have ratcheted up pressure on France to drop its opposition to a natural gas pipeline it sees as vital to reducing European dependence on Russian energy.

The proposed “MidCat” link – which would also enable hydrogen to flow from the Iberian Peninsula via the Pyrenees mountains to the rest of Europe – was at the top of the agenda in a meeting on Wednesday between Spanish Prime Minister Pedro Sanchez and German Chancellor Olaf Scholz.

“I’m very much promoting the idea that we should build this connection,” Scholz told reporters following the bilateral talks with Sanchez in the Spanish city of A Coruna.

Following a meeting with French President Emmanuel Macron earlier this week, Scholz voiced optimism that Paris might drop its resistance and see the benefits of the MidCat pipeline for the whole of Europe.

“We are asking for the Iberian Peninsula to be interconnected, and that is good for France and for all of Europe,” Sanchez said.

Scholz and Sanchez want the €3 billion ($2.96 billion) gas pipeline project to be ready to use by 2025. In the longer term, the two countries want to use the pipeline to sell their own production of green hydrogen to Northern Europe.

Berlin hopes to use Spain’s vast power infrastructure to aid Europe’s largest economy navigate future winters without Russian gas. Germany has historically relied on Russia for around one-third of its energy imports, and has subsequently suffered as Russian President Vladimir Putin turned off the taps to pressure European countries who oppose the war in Ukraine.

Germany recently announced a €200 billion ($198 billion) gas price relief scheme to keep prices affordable for industry and consumers.

According to EU Parliament sources, the panic over the alleged sabotage of the Nord Stream 1 pipeline has helped return discussions on the MidCat pipeline to the forefront of European politics.

French resistance

The 120-mile MidCat pipeline was originally developed in 2013 to move gas from Northern to Southern Europe. The route is planned to stretch across the Pyrenees, from Spain in Hostalric, north of Barcelona to Barbaira in southern France.

Paris has repeatedly dismissed the MidCat project, which was initially abandoned in 2019, arguing that it is unnecessary and likely to go through legal challenges over its environmental impact.

Macron has faced pressure from environmental groups that oppose the pipeline, who argue the war in Ukraine should not be used as a “pretext to restart fossil fuel project”.

Some pipeline advocates believe France’s primary concern is over shielding its domestic nuclear industry from further competition. France generates most of its power from nuclear reactors.

Speaking to EU and French officials, POLITICO reported that in the short term, “Paris wants to sell gas from its four LNG terminals to Germany, instead of being merely a transit country for gas from the south”, while a senior French official said it hopes to sell hydrogen made with nuclear energy in the long-term.

Critics say that France blocking the pipeline from being built would effectively shut out any competition from the Iberian Peninsula.

Earlier this month, France’s Energy Minister Agnes Pannier-Runacher said Paris was open to discussing hydrogen interconnectivity with Spain, but when it came to gas, the MidCat pipeline wouldn’t strengthen Europe’s energy independence and undermined France’s green energy goals.

“This poses a clear problem. We are investing in a fossil infrastructure at the same time as we are organizing the decarbonization of our energy system. There is indeed an inconsistency,” Pannier-Runacher said.

Despite its reservations, the French government said Wednesday that it is re-assessing its opposition to completing the MidCat pipeline.