Spain: Musel LNG Terminal to Be Completed and Shelved

An LNG terminal now under construction in Spain at Musel, Gijón will be completed and then shelved until demand picks up, its operator has said. 

The Musel terminal, which was due to have an annual capacity of 7 billion cubic metres a year, will finish construction by the end of this year but will not immediately begin operations.

A government decree last month instructed the terminal to be put into a "hibernation period" until gas demand rises.

Construction of the terminal was awarded to Enagas in November 2006 and the company was planning to connect the terminal to three existing gas pipelines in Leon, Galicia and Cantabria. When finished, the terminal will have a regasification plant, docking and offloading facilities for LNG vessels.

However, in a bid to save an annual €67 million, the terminal will not begin any operations until the demand for gas, which is on the wane in Spain in recent years, picks up.

Currently, energy supply in Spain strongly focuses on renewables and coal-based energy but Enagas expects the tide to turn for gas demand in Spain this year. Yesterday, the company said that demand for gas had already risen this quarter by 1.4 per cent.

CEO of Enagas Antonio Llarden also said yesterday that a new infrastructure plan will be released by the government later this year, with another LNG terminal expected to be included in the plan, to be built on the Canary Islands.