Global Arab Network | EU: €500 million loan from EIB for Algeria-Spain gas pipeline

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EU: €500 million loan from EIB for Algeria-Spain gas pipeline

Global Arab Network - - Rabih Serrai

Wednesday, 24 November 2010 10:13

The European Investment Bank has announced a €500 million loan to MEDGAZ for the construction of a gas pipeline between Algeria and Spain , in a finance contract signed on Tuesday in Madrid.

The project consists in transporting gas energy from Algeria to Spain over a distance of 210km. It comprises the construction and operation of a sub-sea gas transmission pipeline between Beni Saf in Algeria and a landfall close to Almeria in Spain, with a gas receiving terminal on the Spanish side, a compressor station at Beni Saf, a pipeline with a diameter of 24 inches, a capacity of 8 Gm³/a and short near-shore sections for a potential future second 24-inch sub-sea pipeline. The total project cost is estimated at just over one billion euros (€1,009 million).

A press statement from the EIB said the project had a real added value in terms of energy supply, competitiveness and security. It will contribute concretely to:

* meeting growing gas demand in Spain by diversifying supplies;
* encouraging competitive operation of the internal market by making all the resulting import capacity available to competitors of the main market player of natural gas.
* reinforcing the security of EU energy supply.

Philippe de Fontaine Vive, EIB Vice-President and in charge of FEMIP – the Facility for Euro-Mediterranean Investment and Partnership – commented : “This pipeline symbolizes the undeniable link between the North and the South of the Mediterranean. Energy is a driver of economic growth for both borders, a breeding ground for innovative projects and jobs. It will undoubtedly be a keystone in making the Mediterranean a competitive region.”

The energy challenge in the Mediterranean is an operational priority for the EIB, which between 2002 and 2009 provided energy financing totalling €3.7 billion in the Mediterranean, with flagship projects such as the Tillouguit hydropower plant and the Tangiers wind farm in Morocco, the Gabal el-Zait wind farm in Egypt, the Jordanian pipeline in Jordan, the Ghannouch power plant in Tunisia and the Deir Ali I and II projects in Syria.

A recent study carried out for the European Commission has shown that Algeria and Iraq can substantially meet Europe’s projected increase in gas import demands. According to the MEDRING study: Mediterranean Interconnections in Natural Gas – Supplying the EU Natural Gas Market, the two countries become by 2030 the potentially most important Southern countries for supplying additional gas to the EU. Together, they could supply 27 billion cubic metres in 2030, over and above their 2010 exports. This would account for 77% of the additional supplies needed by the EU.

Global Arab Network

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