It's been a long, hard road, but Portugal is finally on its way to developing a natural gas pipeline grid.
Energy has long been a headache for Portugal, one of those unfortunate nations with no domestic oil or gas production and a government owned refining/distribution company.
In order to enter the European Community, Portugal willingly privatized state owned Petrogal, which had been losing money for years.
TRANSGAS PROJECT
The government has long wanted to develop a domestic gas pipeline system. Various factors have delayed a gas grid, including a dispute last year with Gaz de France, which was to have been the lead company in the project.
Now Soc. Portuguesa de Gas Natural SA (Transgas) has taken over. It is owned by the government, the state owned power company, a state bank, and gas distribution firms. Transgas plans to offer stock to private domestic and foreign investors soon.
Portugal has signed a 2.5 billion cu m/year supply contract with Sonatrach for 20 years beginning in October 1996. About half of the gas is expected to be used for power generation, a third by industries, and the rest by residential users.
The European Union is expected to invest about $630 million in the project (40% of the funding), the Portuguese government 35%, and European Investment Bank 25%.
Cornerstone of the gas grid is a 375 km, north-south trunk line from Setubal, southwest of Lisbon on the coast, to Braga in the far north. Sprouting from it will be 200 km of branch lines feeding four regional gas distribution companies.
The system will be fed by Algerian gas from the Maghreb pipeline under construction. It crosses Algeria, Morocco, and the Strait of Gibraltar to the Spanish gas grid.
A 206 km trunk line will carry Maghreb gas from the Spanish border to the Setubal-Braga system.
Transgas began construction of the north-south trunk line in July at Leiria, a midway point, and was laying pipe at the rate of 800-900 m/day to the south and 600 m/day to the north. It plans to complete 20% of the trunk line this year.
WHAT'S NEXT
Portugal originally planned to import most of its gas as LNG, supplemented by small gas volumes from the Spanish system. Development of the Maghreb line changed that.
But it still plans to build an LNG terminal and regasification plant at Setubal at some point in the future, using it for supplemental supplies.
Transgas also intends to extend the north-south trunk line 70 km beyond Braga to the Spanish border, connecting with the Spanish gas grid at Tuy.
That would enable it to negotiate for future supplies from Norway or Netherlands.
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