UKRAINE WAR: Spain and Portugal call on EU to coordinate energy supply

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MADRID – Spanish and Portuguese officials want the EU to cooperate more closely on energy supply management. Consequently, the invasion of major producer Russia of Ukraine has heightened fears of disruption.

Unlike many of the continent’s countries, which are 40% dependent on Russia for gas, Russia is not the main supplier to either country on the Iberian Peninsula. 

‘Energy supply in Spain guaranteed’

On Thursday, Spanish Ecological Transition Minister Ribera said in Lugo that energy supplies in Spain are guaranteed. Furthermore, this is despite the war in Ukraine and its gas-level derivatives. “In Spain, security of supply is ensured in other ways. Russia is not one of our main suppliers, either by pipeline or by ship. The large capacity for receiving liquefied natural gas in our regasification terminals allows us to be very flexible”, she assured.

Coordination at European level has already been strengthened

Ribera further pointed out that coordination at European level has already been strengthened. “Spain has almost a third of the regasification capacity for all of Europe. The remaining countries that may be more affected make it essential to strengthen coordination on where to unload cargo ships from third countries.

She emphasised Europe has diversified, with common sense, the origin and provenance of the gas. In the case of Spain, Ribera pointed out that the country is fed not only by Algeria but also by countries such as Norway, Qatar, or the United States.

Portuguese Prime Minister Antonio Costa said on Thursday that the Portuguese deep-water port of Sines – the closest European port to the United States – “has the infrastructure to organize exports from the US to Europe.” This would allow energy imports from the US and Africa.

Spain has the largest capacity in Europe to unload liquefied natural gas (LNG) at sea, said Ribera. “It is vital to strengthen coordination as to where suppliers can unload cargoes from other countries,” she said.

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Additional charges

According to Ribera, the national transmission system operator Enagas will sell additional slots for tankers to unload at gas terminals, following previous “extraordinary auctions” last year. “We support Enagas’ prudent decisions to call for additional charges,” Ribera said.

Enagas said in a statement Thursday that it would auction four more slots to add to the 29 already reserved in March. These slots are “for both domestic demand and exports” and correspond to an expected total of 27 in February.

Limited pipeline connections to EU

At these terminals, they convert LNG back into gas, which then has to be pumped elsewhere. Due to limited pipeline connections from Spain to the rest of Europe, this is a limited possibility from Spain or Portugal. Only one connection runs from Spain to France. In 2019, another project to build a France-Spain pipeline through the Pyrenees was rejected.

The Portuguese Prime Minister hopes that the EU will address the issue of energy supply security. “In this context, the increase in interconnections between Portugal and Spain and between Spain and Europe as a whole is decisive.”

Insufficient energy supply to fill the possible gap

Andy Brown is the CEO of Portuguese oil and gas company Galp Energia. On Thursday he told the Publico newspaper that “as of today, not enough liquefied natural gas is available to replace Russian gas.”

“There is a lot of demand and a lot of freight that already has a buyer. Many of which go to Asia. The supplies of LNG (via methane carriers) to Europe have increased recently. Nevertheless, supplies are insufficient to fill the gap if Russia cuts off the gas,” he said.

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