Gas imports from abroad soar in Spain this summer

Spain's government reinforced the electricity grid generation system after the blackout of 28 April, with an energy mix made up of a higher proportion of combined cycle plants than before the incident. This need to inject more gas into the system has been one of the causes of the 44% increase in imports in the first half of the year. Data obtained from the monthly foreign trade report of the Ministry of Economy and Trade reveals that, in June alone, purchases of this product abroad rose by 35% compared to a year earlier.

In June, Spain purchased more gas from abroad than in any other month of June in the past ten years, with the sole exception of 2022 when, as a result of the outbreak of the war in Ukraine, all European countries increased their supplies in the face of the supply cut with Russia. In addition, energy prices at that time were soaring, which somewhat distorts the data - in August 2022, the megawatt/hour reached 308 euros, nothing to do with the 70 euros/MWh that prices have hovered around this past week.

The ministry's data reveals that, between January and June, Spain imported almost 6.8 billion euros worth of gas, 44% more than in the first half of last year. Specifically in June, it bought gas worth 843 million euros, when a year ago imports in the sixth month of the year were less than 624 million.

Where does the gas come from? Fundamentally, from Algeria and the US. The two countries together account for almost 60% of the country's imports of this product, according to the latest Enagás figures for July. In the seventh month of the year, Algeria consolidated its position as the leading supplier of natural gas to Spain, with 32.9% of the total, ahead of the US, although purchases from America have soared in the last year. So much so that for four months of this year, the US has been the leading supplier of gas to Spain, ahead of Algeria. In the last year, purchases of American gas have grown by 75%.

If the tariff pact signed on 27 July between Donald Trump and president of the European Commission Ursula von der Leyen, which requires EU countries to invest 650 billion euros in US energy sources over the next three years, is to be fulfilled, purchases of American gas should grow. However, experts consider this to be wishful thinking. To meet these conditions, EU countries would have to spend some 200 billion a year on energy from the US, which is ten times what the US currently sells to the EU each year.

Beyond the pact with the US, which time will tell whether it can be fulfilled or not, Spain has been trying to reduce its gas purchases from Moscow, although without much success. In July, 15.2% of the imported gas arrived from Moscow - half of what it imported from Russia before the invasion of Ukraine. Although its share is decreasing, this market continues to be the third largest supplier of natural gas to Spain, according to the Enagás bulletin, which places Nigeria (7.7% of the total) and Angola (4.3%) as the countries that complete the top five in this ranking. Spain received a total of 2,150 Gwh of Russian gas in July - a figure similar to that of February 2022, the lowest since the war broke out that month.

Is everything that Spain imports for domestic consumption? No. Spain is the country with the largest number of regasification plants in the whole of the EU, which also makes it a port of entry for gas for its European neighbours. Therefore, it needs to import in order to export. Even with this in mind, data from the Ministry of Trade reveals that exports have plummeted in recent months, falling by 33% in the first half of the year compared to the sales the previous year.