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European gas industry group lauds benefits of PCI list projects ahead of vote

Highlights

EU priority list includes 32 gas projects

Projects complete 'missing links' in Central, East, SE Europe

Environmentalists say projects incompatible with Green Deal

London — European gas industry body Eurogas on Tuesday said gas projects included in the EU's recently published Projects of Common Interest list were "essential" for completing the gas networks in Central, Eastern and Southeast Europe.

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The European Parliament is set to vote on approving the updated list -- which identifies the highest priority energy infrastructure projects to be built in Europe -- on Wednesday.

The list includes 32 gas-related infrastructure projects, as well as many electricity grid projects, and has come under fire from environmentalist groups that say new investment in gas infrastructure is incompatible with Brussels' green ambitions.

"The projects in question aim at completing the missing links in the regional infrastructure of Central, Eastern and Southeastern Europe," Eurogas Secretary General James Watson said in a statement.

"These regions are the least developed when it comes to interconnecting the energy infrastructure of the EU member states. A strong and robust gas network is therefore essential to enhance the security of supply and diversification of sources," Watson said.

PCI project developers can apply for funding from the Eur5.35-billion ($6.2-billion) Connecting Europe Facility, which runs until the end of 2020.

The PCI list includes high-profile planned gas projects, including five LNG import terminals, five gas storage sites and significant pipeline projects such as the Interconnector Greece-Bulgaria, the TAP gas pipeline from Greece to Italy and the EastMed gas pipeline to link Israel and Cyprus to Greece (see table for full list).

It is the fourth update to the list since it was introduced.

Energy committee

The European Parliament vote set for Wednesday comes after its energy committee voted in late January to reject an objection to the fourth PCI list put forward by Green MEP Marie Toussaint.

Environmentalist groups Friends of the Earth Europe and Food & Water Europe say approving the PCI list puts the climate neutrality goals of the European Green Deal in jeopardy.

"There can be no truly Green Deal with more fossil gas," climate justice coordinator for Friends of the Earth Europe, Colin Roche, said.

"It's up to all MEPs to reject this vast list of mega-pipelines and other new fossil fuel projects -- they are not compatible with the climate emergency and tarnish the credibility of any European Green Deal," Roche said.

At the time of the list's publication in October last year, the European Commission's vice president for energy union, Maros Sefcovic, said the list would help the EU build "strong and well-connected networks across Europe in order to enhance security of supply."

Eurogas' Watson said Tuesday gas infrastructure would also be able to carry greener gases -- such as hydrogen, biogas and biomethane.

He said Europe "cannot do without" these gases to achieve carbon neutrality.

"Financing gas infrastructure through the PCIs will deliver the deployment of renewable and decarbonized gases and help achieve the EU's carbon neutrality goals in a cost-efficient way. This is an opportunity one should embrace with open arms," Watson said.

Artelys report

The vote comes as gas is coming under increasing pressure across Europe, with attitudes turning negative more quickly than many in the industry had thought.

The European Investment Bank at the end of 2019 said it had committed to stop approving unabated fossil fuel projects from the end of 2021 and that there were increasing calls for efforts to be focused on renewable electricity to decarbonize the EU economy by 2050.

France-based consultancy Artelys said in a damning report published last month that the majority of the 32 gas infrastructure projects on the fourth PCI list were effectively redundant.

"Most of the 32 gas infrastructure projects on the fourth PCI list are unnecessary from a security of supply point of view, and represent a potential overinvestment of tens of billions of euros, supported by European public funds," Artelys said.

"Existing EU gas infrastructure is sufficiently capable of meeting a variety of future gas demand scenarios in the EU28, even in the event of extreme supply disruption cases," Artelys said.

Gas projects included in the four PCI list are at risk of becoming stranded assets, it said, even in scenarios with higher gas demand.

"Most of the projects are shown to be superfluous from an economic point of view," the consultancy said.

32 gas-related infrastructure projects on PCI list

LNG import terminals
Pipelines
Shannon LNG (Ireland)
Italy-Malta gas pipeline
Krk LNG (Croatia)
Poland-Slovakia interconnector
Gdansk LNG (Poland)
North-south gas corridor in eastern Poland
Alexandroupolis LNG (Greece)
Enhancement of Slovakia-Hungary interconnector
Cyprus LNG (Cyprus)
Greece-Bulgaria interconnector
Expansion of Bulgarian gas network
Storage sites
Bulgaria-Serbia interconnector
Chiren expansion (Bulgaria)
Hungary-Slovenia-Italy interconnector
South Kavala (Bulgaria)
BRUA phase 1
Depomures (Romania)
BRUA phase 2
Sarmasel (Romania)
Croatia-Slovenia interconnector
Incukalns expansion (Latvia)
Trans-Caspian pipeline
TAP pipeline
Other
EastMed pipeline
Conversion to H-gas in France, Belgium
Poseidon pipeline
Reinforcement of Italian network
Latvia-Lithuania interconnector
Baltic Pipe (Denmark-Poland)
Reinforcement of Denmark-Poland interconnection
Poland-Lithuania interconnector
Enhanced compression on Croatia network

Source: European Commission