June 26th, 2017

Tour d’Europe: 6 Particularly Unnecessary Gas Projects in the EU

In this week’s blog, Frida Kieninger from Food & Water Europe takes you on a tour across Europe, examining six of a host of unnecessary planned gas projects. All of these projects currently try to get on the EU Commission’s “Projects of Common Interest” list (PCI list). Here’s why we find these infrastructure plans are far from being in the common interest:

  1. Italy – More Algerian Pipeline Gas?

Italy, the EU’s third biggest gas consumer, has big ambitions concerning the expansion of its already very dense and interconnected infrastructure. Besides plans to build more LNG terminals (import terminals able to regasify liquefied gas shipped to Italy from all over the world), there is also a host of pipeline projects planned. An especially daring one is the Galsi Pipeline, aiming at connecting Algeria and Italy, running through Sardinia. The problem? While Galsi’s construction will be complex and costly, planning to be the deepest underwater pipeline ever built, it’s hard to see the need for this pipeline: Two pipelines that aren’t fully used already connect Italy to North Africa, Tunisia and Algeria. Italy even announced recently it would stop importing Algerian gas via pipeline. Additionally, the country has a number of LNG terminals that are far from being used at full capacity. To be more precise, two of Italy’s three existing LNG terminals were only used at 7% and 3% capacity respectively in the last years.

This infrastructure development comes at a time when gas usage in Italy has decreased by around 19% between 2010 and 2015. Algeria, however, relies  almost 100% on gas for electricity generation while its own resources are more and more depleted. Building a pipeline from Algeria, which relies on gas, to Italy, which doesn’t need Algerian gas, makes no sense.

  1. Northern Ireland – British Gas to Northern Ireland, and Then Back Again

Let’s travel to the North, to the cold waters between Scotland and Northern Ireland. Between the two regions is the SNIP – the Scotland Northern Ireland Pipeline. It is currently only able to carry gas to Northern Ireland from the Scottish side and around Great Britain, with connections to Norway and Belgium and its four (heavily underused) LNG terminals. A new project aims at making gas flows possible from Northern Ireland to Scotland. The only issue: Which gas would flow there? Northern Ireland does not extract gas and has only a small pipeline connecting it to Ireland. It seems strange to upgrade the SNIP pipeline without having a clear idea what the purpose of this upgrade would be. Even if we look at this project in connection with a controversial underground gas storage project currently planned in Northern Ireland, things are not making more sense: A bidirectional SNIP would then just be able to carry British gas to Northern Ireland, store it there and – carry it back to where it came from. Mysterious…

  1. Spain/Portugal: Does a Third Connection to Spain Make Any Sense?

Moving back to the South, this time to the Iberian Peninsula, it is not difficult to spot another unnecessary gas project. While the controversial Midcat pipeline, aiming to connect France and Spain, is getting quite some attention – and rightly so – another interconnection project needs to be mentioned: The 3rd Interconnector between Portugal and Spain. While Portugal does not extract its own gas, the capacity of the two existing pipelines to Spain are sufficient to import over 4/5 of the highest ever recorded yearly Portuguese gas demand. As for the missing fifth: The huge Sines LNG terminal located at the Portuguese coast is largely making up for that, able to import more gas than Portugal used in its peak year in 2011 (~5 billion cubic meters, or bcm). So why build a third pipeline for a country that can already import almost twice as much as its highest measured demand? For a country that managed to fully run on renewables for several days in 2016 and that saw its gas demand drop in the last years? For Spain, this pipeline would make equally little sense, given that it already has access to its own, underused LNG terminals.

 

While some proposed gas projects aim to carry lots of gas to regions that won’t need it, others aim to carry gas that will most certainly not be available. Still other projects aggravate the issue of low LNG terminal usage or simply make less and less sense the more one tries to find any logic behind them.

  1. Eastring – Huge Gas Flows to Slovakia, Bulgaria, Romania and Hungary

Crossing Central Europe and moving even further East, we find another example of a useless pipeline project: The Eastring, a hugely oversized, expensive (€2 billion) infrastructure project which risks becoming a stranded asset if it ever gets built. The main concerned countries of this project are Slovakia, Bulgaria, Romania and Hungary. Their 2015 gas consumption lay at an amount of 27.7 bcm. Since their respective peak years, these countries’ gas demand declined steeply (between 39% and 37% with an exception of Bulgaria with a 14% decline). Still, the Eastring project aims at bringing another 20 bcm to this region, and at a later stage even 40 bcm. These countries already have gas infrastructure in place to deal with higher demand than today, and definitely don’t need a pipeline which on its own could provide for 75% to 150% of these four countries’ gas needs. Unfortunately, the Eastring project is far from being the only gas project envisaged in Eastern Europe, while energy efficiency measures in the region would have an impressively high potential to further decrease gas usage and lead to more energy independence.

  1. Croatia – Connecting to A Mega Pipeline Without Booking Its Capacities

Many gas projects in Eastern Europe seem to expect a piggyback ride on the Transadriatic Pipeline (TAP). The TAP, part of a very controversial €45 billion mega pipeline, the Southern Gas Corridor, aims at carrying gas from Azerbaijan to Europe. The planned Ionian Adriatic Pipeline is one of these projects hoping to justify themselves by planning to carry Azeri gas, from the Albanian part of the TAP all the way up North through Croatia. The only issue: capacities of the TAP are already booked, and there is no capacity available for the Ionian Adriatic Pipeline. Furthermore, we certainly doubt that gas will flow at all through the TAP anytime soon, and even if it does, it is quite unlikely that it will be a lot.

  1. Estonia – Two LNG Terminals for A Tiny Gas Consumer?

A total number of two LNG terminals to regasify liquefied gas are planned in Estonia, a country with very limited gas demand. Even if only the smaller LNG terminal, Padilski, were built, it would cover Estonia’s yearly gas demand twice. Tallinn LNGs’ import capacities would outnumber the Baltic country’s gas demand eight-fold. The main argument to build these terminals is to decrease dependence on Russian gas. But this can already be taken care of by an existing LNG terminal in Lithuania: Klaipeda LNG. Its capacities are high enough to supply all three Baltic countries with gas and it’s currently largely under used. Even fertilizer producer Achema booked a considerable part of Klaipeda’s capacity.

All these projects come with a lot more problems than those outlined above. They lock us into fossil gas dependence for decades given their long lifespan; they channel money off projects that make sense and are urgently needed, particularly renewables and energy efficiency projects; and they aggravate dependence on gas and all the problems its extraction entails for our health, environment and affected communities, while strengthening the role of gas as a bridge to climate chaos.

Read Part II of Tour d’Europe

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