Gas from Spain?

| Foreign Markets |

Until recently, Spain has not been associated with the trade of energy resources. However, the country is now likely to become one of the countries which matter in this sector of the global economy.

Unexploited deposits

Although Spain has never exploited any oil deposits – as none used to be known – the situation is likely to change. Rich oil deposits, estimated at 2 billion barrels, were discovered in the vicinity of the Canary Islands and Ibiza (in the Balearic Islands). Deposits of this size give the opportunity to satisfy 20% of the domestic demand for the resource. Natural gas deposits, which are present next to the oil deposits, are believed by experts to reach 400 billion cubic meters. What is more, Spain (the same as Poland) has got deposits of shale gas, which have not been exploited so far. Their volume is estimated at about 2 billion cubic meters.

Not a drop from Russia

At present, Algeria, Qatar and Nigeria are the main suppliers of natural gas to Spain. A gas pipeline on the seabed of the Mediterranean Sea connects Algeria and Spain. Qatar and Nigeria supply liquified natural gas to the six Spanish LPG terminals. Interestingly, Madrid does not buy any gas from the Russian Federation whatsoever. Thanks to such system of natural gas sourcing by Spain, there appears to be an opportunity for other EU countries to diversify the supply of this resource, especially that the East-Central Europe needs to become independent from the deliveries of gas from Russia.

Connections are needed

In order to follow this scenario, the European system of gas transmission would have to be expanded. Although Spain does have the required infrastructure, the interconnectors on the borders of other countries are lacking. There is only one connection at the moment, on the Spanish-French frontier. The second one is going to be finished in 2015. However, the key development is the construction of Midcat gas pipeline, which would make it possible to expand the transmission capacity of Spain to 14 billion cubic meters of natural gas per year. According to experts, this investment could provide Europe with 10% of the natural gas supplies which are now bought from Russia.