The Spanish government has passed a legal decree postponing the start up of Spain's seventh liquefied natural gas (LNG) import terminal. El Musel, at the Spanish port of Gijón, will be put into hibernation in a drive to save money by trimming the country's regulated access tariff bill, under a decree law announced in the Spanish state bulletin BOE on 31 March.

The decree acts on a proposal published by Spanish energy regulator CNE early in March (see ESGM 16 March 2012) in which it said freezing the commissioning of El Musel - construction on which is almost complete - would save around E13m/year in regulated third-party access charges.

"The construction of new gas infrastructure should be limited to keeping to binding international commitments derived from the construction of gas interconnections and serving new consumers, provided this does not entail additional costs to the system," the decree said.

It added that the new measures would not affect security of supply, since usage of existing LNG import infrastructure was currently at only around 40-60% of capacity and would remain so until 2014. Falling gas demand in Spain and higher imports via new pipeline infrastructure are behind the declining use of Spain's LNG terminals. Construction on El Musel will continue but the plant would not be commissioned "until demand justifies it", the decree said.

A spokeswoman for Spanish gas transmission system operator Enagás, which is building the plant, was unable to give a target start-up date on Monday and a government spokesman could not be reached for comment.

The government's decision postpones not just El Musel but also all gas infrastructure projects classified as "Category R". These are projects reclassified from mandatory projects to being subject to possible reconsideration on financial grounds, in the 2012-2020 Infrastructure Plan. The only exclusions to this are planned upgrades to the six existing LNG terminals.

The blanket nature of the postponement of all Category R" projects means that several associated pipeline links related to El Musel have also been shelved. These include links between El Musel and the main grid. Enagás has already spent E380m on El Musel alone. The Enagás spokeswoman admitted that the decision was frustrating, but was unable to say whether the company would appeal against the decision, or when it might finally be commissioned.

An appeal seems unlikely since, according to both the CNE and the government, the new LNG terminal would jeopardise the safe operation of the existing plants - three of which are owned by Enagás - by dangerously reducing LNG inflows.

Import terminals require a minimum level of LNG to pass through them or they have to be taken off line. This is understood to be a reference in particular to the independently operated Mugardos LNG terminal just down the coast from Gijón at Ferrol. According to Enagás, the terminal unloaded 14% less LNG in February than in the same month last year, with only three vessels docking at the terminal. RS

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