Gas companies working 'urgently' to expand France-Spain pipeline

MADRID (Reuters) - Spanish gas system operator Enagas said on Thursday it was working "urgently" with French counterpart Terega on increasing the capacity of a cross-border pipeline as Europe scrambles to shore up its energy supplies.

There are two pipelines between France and Spain with combined capacity to transport seven billion cubic metres (bcm) of gas per year, equivalent to seven liquefied natural gas (LNG) tankers per month, and a third interconnection is being mulled.

Enagas said capacity in the duct that goes from the northern Spanish town of Irun through the Pyrenees mountain range could be boosted by a further 1.5 bcm a year after an upgrade.

"Urgent technical work is being carried out at the Irun interconnection to maximise the use of its two motor compressors," Enagas said.

Europe is scrambling to diversify its energy sources after Russia's invasion of Ukraine plunged the continent into an energy crisis.

France, once the continent's top power exporter, may not produce enough nuclear energy this winter to help European neighbours seeking alternatives to Russian gas, and may even have to ration electricity to meet its own needs.

Spain and Portugal have seven LNG terminals they say could help supply central Europe if additional pipelines are built. Discussions have been revived around a Spain-to-France project dubbed "Midcat" that was shelved in 2019.

But France is against the project, arguing the two existing pipelines are under-utilised with flows going mainly towards Spain.

Terega's biggest shareholders are Italian gas grid operator Snam and Singapore sovereign wealth fund GIC, according to its website.

(Reporting by Emma Pinedo; Editing by Andrei Khalip and Mark Potter)