EU's Breton says unclear if gas pipeline from Spain makes economic sense

BERLIN (Reuters) - European Union industry chief Thierry Breton said on Thursday it was uncertain whether a pipeline connecting the Spanish and French gas grids would be profitable.

German Chancellor Olaf Scholz last month pushed for the construction of a pipeline from Portugal through Spain and France to central Europe to help wean Europe from reliance on Russian energy, saying he had lobbied for such a project.

French President Emmanuel Macron said on Monday such a pipeline was not necessary since capacity on the two existing cross-Pyrennes gas pipelines was under-utilised and that gas flows were going mainly in the direction of Spain.

"It is unclear if such a project would make sense economically," Breton told reporters in Berlin, one day before EU energy ministers were due to hold an emergency meeting in Brussels to discuss soaring energy prices.

The EU proposed a price cap on Russian gas on Wednesday after President Vladimir Putin threatened to cut off all energy supplies if Europe took such a step, raising the risk of rationing in Europe this winter.

The escalating standoff could drive sky-high European gas prices higher still, adding to already eyewatering bills EU governments are paying to stop energy providers collapsing and prevent cash-strapped customers freezing in the cold months ahead.

Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia blames those sanctions for causing the gas supply problems, which it puts down to pipeline faults.

(Reporting by Andreas Rinke; Writing by Sabine Siebold)