Importance of Spain’s Natural Gas System to Europe

Since Russia’s invasion of Ukraine, Spain’s gas system has been gaining interest from various market players to help the European Union curb its dependence on Russian gas. (With 6 Charts & a Table)

Spain’s Natural Gas Infrastructure, 2022

Source: IEA, 2022.

Spain serves as a strategic entry point for LNG, holding the largest fleet of LNG terminals, regasification, and storage capacity in Europe. The country can import piped natural gas from North Africa and has two interconnections with neighboring France and Portugal. In 2022, Spain received natural gas and LNG from 19 different countries, positioning itself as a key player in the European market and a contributor to Europe’s security of gas supply. Since Russia’s invasion of Ukraine, Spain’s gas system has been gaining interest from various market players to help the European Union curb its dependence on Russian gas.

Gas Consumption in Spain

Spain’s natural gas consumption peaked in 2008 at 40.8 billion cubic meters (bcm). Gas consumption then started declining gradually reaching a historic low in 2014 at 28.2 bcm before it started to recover over the past few years, reaching its highest figure of 36.9 bcm in 2019. Last year, however, gas consumption dropped by 3.7% year-on-year to 33.1 bcm, according to data from Spanish grid operator Enagas (Figure 1). The decline in gas consumption was due to lower conventional demand (from industrial, household, and commercial sectors) which fell by 21.4% compared to 2021.

The decline was partly offset by higher demand in the power sector which increased by 52.7% compared to the previous year, highlighting the crucial role played by natural gas as a backup for intermittent renewable energy sources in Spain.

Most of the gas demand in the Spanish market is for conventional use, mostly driven by the industrial sector, which in 2022 accounted for 62% of total gas consumption. Meanwhile, conventional demand for gas in the power sector accounted for 38% as shown in Figure (2).