Barcelona-Italy, the route for gas accelerated by the war

MADRIDSpain and Italy are the only two countries in the European Union that have a gas pipeline connecting them to Algeria, but at a time when Russia is reducing its gas shipments, these two European countries have started to look at each other. Specifically, the Port of Barcelona and the cities of Livorno, Panigaglia and Porto Levante, near Venice, and the liquefied natural gas (LNG) regasification plants that the four locations have.

During the first six months of the year, up to 37,000 tons of LNG have left the Barcelona plant. The main shipments are, precisely, to Italy and, to a lesser extent, Gibraltar, France and Sweden, as the Port of Barcelona explains to ARA. Although these are not very large shipments of LNG – it should be borne in mind that Spain is not a gas-producing country and, therefore, much less LNG leaves than arrives – due to the war in Ukraine and the decrease in Russian gas supplies, the Spanish government, hand in hand with the industry, is exploring how it can expand its role as a supplier to Europe

Here, regasification plants play a peculiar role. Unlike pipelines, these have not been designed to send fuel, but as an infrastructure for receiving and storing gas. As Spain has such a large regasification capacity – 40% of the entire European Union thanks to its six plants – the idea now is to increase the number of methane tankers arriving at the plants, such as the one in Barcelona, from producer countries to unload the LNG and then re-export it to other European countries.

At the moment, LNG from Spain is being made available to Italy through a shuttle service, i.e., LNG tankers heading to one of the regasification plants in the Mediterranean, according to a source familiar with the operation. The same source adds that it is about one LNG tanker per month. And this is where the Barcelona regasification plant comes into play: "It is not only a question of capacity, but also of logistics and proximity to Italy".

The Barcelona regasification plant has the largest LNG storage capacity in Spain (760,000 cubic metres according to Enagás data) and has seen a 144% increase in the first six months of the year in the arrival of LNG from the United States (35% of the total). The second biggest exporter is Qatar (18%), followed by Nigeria (17%).

More LNG to Italy

Of the three LNG regasification plants in the neighbouring country, the Adriatic plant is operating at almost 100%. However, both the smaller Panigaglia and Livorno plants can receive more fuel and are the final destination of this shuttle service. At the moment, the former is being used at about 55% of its capacity, while the Livorno plant is running at 60%. With the outbreak of the war in Ukraine, the import capacity of the two smaller plants has been increased and the country's average regasification levels have been boosted to 13.2 TWh/month, equivalent to 14 billion cubic metres of natural gas per year, according to industry data accessed by ARA. The level is very close to the total regasification capacity of all three Italian plants: 16 TWh/month (17 billion cubic metres of natural gas per year). If the three plants were used at 100%, an additional 2.8 TWh/month (an additional 3 bcm per year) could be unloaded. Taking into account that the available plants are those of Panigaglia and Livorno, which can only receive medium-sized ships, this would be equivalent to 6 medium-sized ships (70,000 cubic meters of LNG) per month, or 72 per year.

However, it must be borne in mind that the Barcelona plant cannot re-export all the gas that it receives it because its purpose is that of a supply point for Spain. In fact, the Spanish government's aim is for regasification plants to be at 80% capacity this winter. For now, the Barcelona plant is at 81%, according to the latest data from Enagás. It should be borne in mind, however, that these levels fluctuate greatly in comparison with the subway storage facilities (these are at 78%) because the inflow and outflow of gas is daily.

A future gas pipeline

Enagás included in its strategic plan for 2030 a future maritime gas pipeline that would connect Barcelona with Italy, specifically with the port of Livorno. It is an idea that the Spanish government, the Italian government and the industry see with good eyes. Even Europe has included it in its RepowerEU investment plan to expand energy interconnections. "It can work to bring resources from the southern Mediterranean to northern Europe," said Enagás CEO Arturo Gonzalo Aizpiri. The infrastructure would account for the bulk of the investment that the company has foreseen until 2030 (€1.98bn) for three major interconnection projects: the gas pipeline to Italy, improving the Pyrenean connection with France and the connection with Portugal, with whom Spain shares a gas pipeline.

To supply Europe, the Spanish government's other star possibility is to expand the technical capacity of the gas pipelines connecting the Iberian peninsula with France. Sources in the sector confirm to ARA that Enagás has been working with the French operator for some days now, simulating gas increases through the gas pipelines in Navarre and the Basque Country, and the first estimates point to the possibility of increasing gas exports by up to 18%.