French and Spanish operators create venture to develop hydrogen pipeline

By America Hernandez

PARIS (Reuters) -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 euro ($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 2 million metric tons of hydrogen made from renewable electricity annually when built - roughly 10% of expected EU hydrogen consumption in 2030.

In the venture to operate Barmar, Enagas, also a grid operator, will hold 50%, Natran will hold 33.3%, and Terega 16.7%, Natran's statement said.

The European Union last month approved funds covering 50% of the project development costs.

Earlier this year, Enagas CEO Arturo Gonzalo said a final investment decision on H2Med was unlikely before 2028.

($1 = 0.8519 euros)

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