Enagás SA, Spain’s transmission system operator (TSO), has renewed talks to create more natural gas pipeline infrastructure between France and Spain in the wake of Russia’s invasion of Ukraine.

CEO Arturo Gonzalo said during a first quarter earnings call the company is “working closely” with its French TSO counterpart, Teréga SAS, to propose an additional interconnection between the countries. If approved by regulators, the project could revive the Midi-Catalonia Pipeline project, or MidCat, that was canceled in 2019 after French regulators ruled it wasn’t financially viable.

Gonzalo said the continued work on the interconnection wasn’t the result of changing policies by any one country or regulator, but an entirely different dynamic for the Western European energy system.

“A few years ago, we could be questioning the commercial interest of this interconnection, but this interconnection was being thought of for a different objective,” Gonzalo said. “We wanted to send gas from the north to the south, and now we’re talking about something else.”

Thanks in part to a glut of regasification capacity in Portugal and Spain, Gonzalo said, the two current interconnects with France have been sending massive volumes of natural gas north as its neighbor deals with a reduction of both Russian gas import and nuclear power generation

Spain currently has six regasification terminals and has been trying to procure more capacity with floating storage and regasification units.

Enagás also reported that 70% of Spain’s gas supply came from imported liquefied natural gas during 1Q2022. U.S. producers accounted for the majority of the volumes with 37%. While Spain has most of Europe’s spare regasification capacity, it also lacks adequate pipeline infrastructure to move gas to the rest of Europe.

The TSO said its system operated at 100% capacity during the first quarter. Natural gas demand in Europe spiked during a cold winter that left storage inventories depleted. The war in Ukraine has also jeopardized the continent’s natural gas imports, roughly a third of which come from Russia. 

As Europe has looked to diversify its supplies and refill inventories, prices have remained elevated and attracted an influx of LNG cargoes. In January and February, more than 70% of U.S. LNG exports went to Europe, according to NGI calculations. More regasification capacity and infrastructure to move gas from Southern to Northern Europe could help the continent bring in additional supplies.