CAPITAL: MADRID
MONETARY UNIT: PESETA
REFINING CAPACITY: 1,293,500 B/CD
OIL PRODUCTION: 4,500 B/D
OIL RESERVES: 21 MILLION BBL
GAS RESERVES: 18 BCF

Spain, one of the last nations in Europe to embrace natural gas use, in 2000 was pressing to build pipeline networks and obtain supplies.

The state company Gas Natural SDG SA said it planned to invest $3.69 billion over 5 years to expand its network in Spain and boost the use of gas.

Natural gas accounted for just 11% of Spanish energy consumption, half the European Union average, Gas Natural said.

Gas Natural SDG SA, which controlled almost 90% of Spain's natural gas market, planned to invest $56 million through 2010 on extending its pipelines in the north of Spain.

It aimed to extend its transportation and distribution network in Spain's Cantabria region by 1,069 km. Gas Natural said it aimed to supply 83% of the region's population with gas by 2010.

Gas Natural was speeding pipeline construction because the government shortened the gas market's transition period to full competition to 10 years from the 15 years initially proposed. During the transition, competitors were banned from building pipelines where Gas Natural had lines.

Endesa SA, Spain's biggest power company, and Gas Natural, its dominant gas supplier, received approval to construct the first gas-fired power plants in the country.

Endesa and Gas Natural said they would build four stations as part of their energy alliance. The ministry authorized construction of two Andalusian stations at San Roque, near Cadiz. The site would have an installed capacity of 800 Mw.

The ministry in late 2000 said it had received 33 requests to build gas-fired plants with capacity of 16,470 Mw, compared with the 44,000 Mw of installed capacity in Spain.

A third of the petitions were from companies, both foreign and Spanish, that didn't yet generate electricity in Spain.

Gas supplies

Spanish utility Union Fenosa awarded M.W. Kellogg Ltd. a contract to provide basic engineering design for a liquefied natural gas terminal.

The $240 million terminal at Valencia would include storage capacity of 450,000 cu m and LNG vaporization capacity of 5 billion cu m/year.

The terminal was expected to be operational in 2004.

BP PLC made an undisclosed multimillion-dollar investment in a fully integrated LNG power project in northern Spain.

The Bahia de Bizkaia project, in which BP had a combined 25% interest, consisted of an 800 Mw combined-cycle gas turbine power plant, a 2.75 billion cu m/year regasification facility, an LNG import terminal, and 300,000 cu m of storage capacity.

The three other partners in the project were Repsol-YPF SA, Spain's Iberdrola Energia SA, and the Basque Energy Authority (EVE). Each had 25% in the Bahia de Bizkaia Gas group, which was to develop the regasification plant, and the Bahia de Bizkaia Electricidad group, which would develop the power station.

BP said Spain was one of the fastest growing gas markets in Europe and expected demand to double to more than 30 billion cu m/year during 2000-10.

Babcock & Wilcox Española was appointed consortium construction leader on the $310 million power plant project. Spain's Initec would lead the consortium to construct the $240 million regasification plant. Construction was expected to begin by early 2001, with the power station scheduled to begin operation by yearend 2002 and the regasification plant by mid-2003.

Of the regasification plant's output, 1.1 billion cu m/year would go to the power plant, 1 billion to the local distributor Gas de Euskadi, and 0.6 billion to Repsol-YPF. The facility could be expanded to 6 billion cu m/year.

BP, ENI, Endesa of Spain, Gaz de France SA, and TotalFinaElf SA planned to participate with Algeria's Sonatrach and Spanish company Cepsa in a feasibility study for the third Algeria-Europe gas pipeline.

The project, by joint venture Medgas (formed by Sonatrach and Cepsa), planned a 450-km pipeline between Beni Saf in northwestern Algeria and Almeira in southern Spain.

Sonatrach and Cepsa said the project was technically feasible and economically attractive because of projected increases in European gas consumption.

Algeria is linked to Europe by two other gas pipelines. The first line, on stream since 1966, provides Morocco, Spain, and Portugal with 10 billion cu m/year. The second, in operation since 1983, supplies 20 billion cu m/year of gas to Italy via Tunisia.

Oil operations

Repsol-YPF SA had an oil discovery off Spain near the Casablanca complex of fields.

The Chipirón Northeast wildcat flowed 8,000 b/d of 40°-gravity oil. Repsol was operator with 98%. LOCS Oil Co. SA of Spain had 2%.

Chipirón Northeast was expected to go on stream in late 2001 via Chipirón-1 field. Both would produce via the Casablanca platform, which was linked by pipeline to Repsol's 180,000-b/d refinery at Tarragona.

The Casablanca platform produced oil from the Casablanca, Rodaballo, Boqueron, and Barracuda fields.

Petroleos e Gas de Portugal SA planned to invest up to $114 million in Spain to open service stations and boost its market share. Galp planned to open 15 service stations/year during its 4-year investment plan. By 2004, it expected to have sales of 3.6 billion euros/year, giving it a 3.9% market share.

The European Commission decided in late 1999 to give Spain an additional year, until Jan. 1, 2002, to comply with the commission's ban on unleaded gasoline.

It explained Spain needed the additional time for public education campaigns aimed at owners of cars built to use leaded fuel.