French and Spanish operators team up to develop cross-border hydrogen pipeline

French gas grid operator Natran, a unit of utility Engie, has created a joint venture to develop a cross-border hydrogen pipeline with French storage operator Terega and Spain's Enagas, it said on Thursday.

The Barcelona-to-Marseille underwater pipeline, or Barmar, is part of a larger €2.5 billion ($2.93 billion) project called H2Med that will link Portugal, Spain, France and Germany by 2030, as the European Union hopes to displace some natural gas use with hydrogen, which, "does not emit CO2 when combusted."

H2Med is planned to have a capacity to transport two million tonnes of hydrogen made from renewable electricity annually when built, roughly 10 per cent of expected EU hydrogen consumption in 2030. In the venture to operate Barmar, Enagas, also a grid operator, will hold 50 per cent, Natran will hold 33.3 per cent, and Terega 16.7 per cent, Natran's statement said.

The European Union last month approved funds covering 50 per cent of the project development costs. Earlier this year, Enagas CEO Arturo Gonzalo said a final investment decision on H2Med was unlikely before 2028.

(Reporting by America Hernandez and Dominique Vidalon; Writing by Makini Brice; Editing by Benoit Van Overstraeten and Barbara Lewis)