July 31, 2024 [Reuters]- The Spanish government gave a first go-ahead on Tuesday to gas grid operator Enagas (ENAG.MC) to start developing the Spanish section of a planned trans-European hydrogen pipeline and related hydrogen infrastructure projects.

Enagas – in which the Spanish state owns a 5% stake – is moving to transition from its traditional role as a natural gas grid operator to managing a network of hydrogen infrastructure, taking advantage of the Spanish government’s plans to become a European hub for green hydrogen.

Key to the government’s and the company’s plans is the flagship H2MED hydrogen pipeline project, which would connect the Iberian peninsula to France and on to Central Europe by 2030.

Enagas is teaming up with French, German and Portuguese peers to develop the project. It expects net investment of around 3.2 billion euros ($3.5 billion) through 2030 to develop its hydrogen projects, including the H2MED corridor.

On Tuesday, the Spanish government said Enagas could move forward with hydrogen projects deemed of European interest and part of the H2MED corridor, including an interconnection with Portugal, an underwater pipeline between Spain and France known as “BarMar”, and hydrogen storage facilities.

The government said its approval is provisional at this stage but did not specify what further steps might need to happen before work starts.

Green hydrogen, produced using renewable energy, is seen as a key to decarbonise Europe’s economy. However, given its cost, green hydrogen projects in general are currently not competitive without subsidies.

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