February 23, 2024

Enagas SA has decided to launch an auction proper after a “high level of participation” in a non-binding bidding activity for logistics rights to a liquefied natural gas (LNG) terminal in northern Spain that has been idle for a decade.

The binding round for Asturias province’s El Musel facility seeks to award 100 percent of the capacity, for loading, unloading and storage, on “long-term” contracts, the company said in a press release Monday.

Enagas has set June 30 as the deadline for bid submissions. Sixteen shippers had expressed interest during the non-binding phase held March, according to the media statement.

“This Open Season for the allocation of logistics services in El Musel is a milestone for the start of commercial operations of the terminal, which is part of the Government’s More Energy Security Plan, and will strengthen the security of energy supply in Europe”, the Madrid-based owner said.

Located in the Cantabrian basin in the port city of Gijon, El Musel concluded three years of construction 2012. The bidding paves the way for commercial startup for the two-bay, two-tank terminal after being mothballed for a decade.

It has a regasification capacity of 800,000 cubic feet and can store up to 300,000 cubic feet of LNG, according to an assets catalog published by Enagas.

“The Gijon terminal could contribute up to 8 bcm (billion cubic meters) of LNG capacity per year to Europe’s security of energy supply”, Monday’s announcement said.

It got the approval of the National Markets and Competition Commission February, a required step before commercial rights could be awarded for the terminal, Enagas said March 2.

Later in February Enagas announced a deal with local natural gas transporter Reganosa in which the latter acquires a 25 percent stake in El Musel for $102 million (EUR 95 million). In exchange Enagas acquires an 80.78-mile (130 kilometers) network of natural gas pipelines from Reganosa for $58 million (EUR54 million), according to Enagas’ announcement February 28.

Eyes on Germany

Enagas chief executive Arturo Gonzalo Aspiri had said the terminal was eyeing to export to Germany, amid supply challenges unleashed by Russia’s invasion of Ukraine.  “This will give flexibility and storage capacity to European operators, mainly in Germany”, he was quoted as saying in a Bloomberg report September 8, 2022.

Europe’s biggest economy declared an alert level status for gas supply June 2022 after Russia reduced deliveries “resulting in a considerable deterioration in the supply situation”, the German government said in a press release June 23.

The Nord Stream pipeline connecting Germany and Russia resumed supply July 2022 after closing for what the operator said was maintenance, according to a July 21, 2022 news release by Nord Stream AG.

But the Baltic Sea conveyor took damage September 2022 from what a Swedish probe said was a sabotage by unknown actors. An investigation update April 6, 2023 by the prosecution authority of Sweden, where part of the two Nord Stream pipelines lies, said the damage had been caused by “detonations” and that both pipes had taken a hit. A report by Russian state media TASS May 20, 2023 said Nord Stream remained “completely suspended.”

However German Finance Minister Christian Lindner told BBC in a report January 18, 2023 his country is no longer dependent on Russian energy: “Yes, of course Germany is still dependent on energy imports, but today, not from Russian imports but from global markets”.

To contact the author, email jov.onsat@rigzone.com

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