Spain's new LNG terminal at Musel will effectively be put into "hibernation" once it is completed, Antonio Llarden, the CEO of gas infrastructure operator Enagas, said Tuesday.
The 7 billion cubic meter/year terminal under construction on Spain's northern coast is expected to be completed by the end of this year, Llarden told analysts in Madrid, but will not be brought online "until demand justifies it," as specified by a government decree last month.
Spain's internal gas market has been hit by a slump in demand for power generation caused principally by a boom in renewable generation, which takes precedence in the generating mix, and by a national decree incentivizing coal-based generation.
With the gas system running at a deficit in 2011, the government decreed in March that the Musel regasifier's startup would be delayed, with a potential saving of Eur67 million ($88 million) in regulated costs each year.
However, gas demand is forecast to grow 2.5% in 2012 amid a surge in new connection points and a strong increase in LNG trading, Enagas data released Tuesday shows.
With this in mind, Llarden said Enagas expects to see a continuation in this demand growth over the next few years. indeed, Spain's largest gas company Gas Natural Fenosa is targeting 155,000 new points of sale in Spain this year and similar figures for the next three years.
The company also said it will target LNG trading as a growth area, having increased its international LNG sales by 30% in 2011.
Spain operates six LNG terminals on its mainland with a maximum combined capacity of 60.4 billion cubic meters/year. It also has a gas import capacity of 22 Bcm/year.
Total gas transported in Spain rose 1.4% to 124,688 GWh in the first quarter this year aided by colder temperatures than usual, the company said Tuesday. Exports in the period totaled 9,312 GWh, down 16% year on year while 4,307 GWh was loaded onto ships as LNG, the company said. This was a fourfold increase on the first quarter last year, Enagas added.
Enagas is expecting the government to publish a new infrastructure plan covering the period 2012-2020 in the second half of this year, in which plans for a proposed second LNG terminal on the Canary Islands from 2015 should be included, Llarden said.
