Spain’s Gas Prices Surge 50% as Pipeline Closure Strains Supply

Importing LNG is very expensive for Spain, as the gas arrives by ship. But it really doesn’t have a choice if it wants to continue to supply itself with gas to build up reserves for the approaching winter and face the threat of power cuts.

Since the closure of the Maghreb-Europe pipeline on October 31, gas reserves in Spain have fallen by nearly 10%, reports Ok Diario, specifying that the increase in the price of LNG will have repercussions on the gas bills of consumers and businesses. Large Spanish companies are paying for gas twice as much as German companies, which affects their competitiveness, the same source assures.

Read: Spain Lawmakers Probe Gas Supply Contingency Plans Amid Algeria Concerns

The rise in the price of LNG will also impact the price of electricity, which will be more expensive, with combined cycle power plants having become the first energy source in the electricity production mix in Spain, with 27% of production at the end of November, above nuclear and wind power. With the closure of the GME, LNG imports account for 64% of all gas imported into Spain, whereas they generally did not exceed 50%.

Vice President for Economic Affairs, Nadia Calviño, assured on Tuesday that Spain has sufficient gas reserves to cope with any shortages. For its part, the company Enagás forecasts an 8% increase in demand compared to last winter, while current reserves are down 20% compared to last year.