The EU bank

MEDGAZ, the first gas pipeline to be built under the Mediterranean connects Algeria (Beni Saf) to Spain (Almería). It is expected to transport nearly 8 billion cubic metres (bcm) of gas a year and, has cost nearly EUR 1bn, half of which financed by the EIB.

In April the Algerian group Sonatrach – Europe’s fourth-largest gas supplier – started to provide its Spanish (Cepsa, Endesa, Iberdrola) and French (GDF Suez) MEDGAZ partners with gas. The 1050 km long gas pipeline is a technological feat “symbolising the undeniable link that exists between the north and south of the Mediterranean”. This "priority trans-European network energy sector project" benefited from the EIB’s largest ever energy loan.

The route MEDGAZ takes is direct and cost-effective, making supply more reliable and more competitive. The pipeline is under water for 230 kilometers and it is the first to be built in the Mediterranean at a depth greater than 2 000 m. It will also provide 55% of gas consumption in Spain up from 30% previously.

The cooperation agreement between the EIB and Medgaz will continue over the next 20 years. Medgaz has a total capacity of nearly 11.5 billion cubic meter per year of which 8 bcm/year go to MEDGAZ and the remaining capacity supplies natural gas to the Algerian power plants in Hadjret Ennous and Terga.

During the construction phase, the port authorities of Almeria and the local university launched an environmental management programme to improve air and water quality in the area. Up to 100 direct jobs will be created, including 50 in Almería, where the central offices and pipeline control room are located.