BARCELONA/LISBON, Dec 9 (Reuters) - An underwater
pipeline to carry green hydrogen between Barcelona and Marseille
will cost around 2 billion euros ($2.1 billion), according to
preliminary estimates of the project agreed between Spain,
Portugal and France, two sources told Reuters.
It comes as an energy crisis caused by the war in Ukraine
has accelerated European plans to bolster renewable energy as an
alternative to Russian gas. Spain and Portugal aim to become
clean hydrogen hubs and net energy exporters, causing tensions
with France which plans to produce its own hydrogen using
On Friday the leaders of the three countries will meet in
the Spanish city of Alicante together with European Commission
President Ursula von der Leyen to discuss a construction
timeline and financing for a new hydrogen pipeline.
The price estimate does not include the cost of linking the
pipeline, dubbed H2MED, with connections on land, the two
sources with knowledge of the matter said, with the second - an
industry source - adding it could rise to around 3 billion euros
depending on the underwater route the pipe takes.
The submarine pipeline was proposed in October as a
substitute for the so-called MidCat pipeline project across the
Pyrenees, which had been championed by Spain and Portugal who
said it could help relieve immediate pressure on gas supplies
but opposed by France.
The pipeline will only carry hydrogen in order to meet EU
funding criteria, though "improvements" could be made in future
to allow for some gas, a Spanish government source said.
French President Emmanuel Macron and his Spanish and
Portuguese counterparts Pedro Sanchez and Antonio Costa intend
to apply for European Union funding for the project as early as
next week, said the Spanish government source and an Elysee
As a result, the industry source said, they have pushed
their four grid operators to "speed up technical studies,
potential pipeline layouts and cost assessments".
Spain's Energy Ministry and its gas grid operator Enagas
, and Portugal's grid operator REN declined to comment
while its Energy Ministry did not respond to a request for
comment, the French Energy Ministry and its grid operators GRT
and Terega declined to comment on cost estimates.
The project's timeline remains uncertain. Without technical,
environmental or regulatory challenges, it could be completed
between four and five years, said the first source with
knowledge of the matter.
But the second, industrial source said French officials
consider readiness by 2030 optimistic.
Much of European investment in hydrogen is happening on the
Iberian peninsula. Oil company Cepsa on Dec. 1 said it will
invest 3 billion euros ($3.15 billion) in developing the
renewable fuel, while Portugal also plans to become a major
producer and exporter.
Some observers are sceptical about H2MED's chances of
success, with Faig Abbasov, shipping programme director, at
Transport & Environment, a Brussels-based NGO, labelling it as
"window dressing" to reduce political tensions raised by MidCat.
"If you already have an overland pipeline why build an
undersea pipeline?" Abbasov said. "Spain would be better off
exporting by sea."
($1 = 0.9517 euros)
(Reporting by Joan Faus and Sergio Goncalves; additional
reporting by Belén Carreño, Michel Rose and Charlie Devereux,
writing by Joan Faus and Charlie Devereux, editing by Aislinn
Laing and David Evans)