Amid break with Russia, Europe needs single energy market: Portuguese economy minister

OVIEDO, Spain

The European Union needs a single energy market with more international connections to boost its resilience amid the break with Russia, Portugal’s economy minister said in an interview published on Monday.

“If we already had a single market (now), Europe wouldn’t be in this situation. (Not establishing one) was a huge strategic error,” Antonio Costa Silva told Spanish daily El Pais.

He also warned that it is “highly likely” that with the Ukraine war and EU sanctions on Moscow continuing, Russian President Vladimir Putin will fully cut off gas exports to Europe in “the depths of this winter.”

“He’s recomposing his alliance with China, India, and other Asian countries. And the little gas he’s exporting to Europe is already generating revenues beyond that of the past because of the astronomical prices, so he’s in a position to do so,” said Costa Silva. “And if he does, we’ll see major upheaval in the energy markets.”

He argued that Europe will need to develop a solid plan to deal with this situation. A key part of the solution, he argued, will be found in the Iberian Peninsula, where both Portugal and Spain are located.

Portugal is currently negotiating with Germany, Poland, and the Baltic states to turn the deep water Port of Sines – the largest port in Portugal and the EU’s closest to the US – into a European gateway for US liquefied natural gas (LNG). Costa Silva explained that it could cover part of northern Europe’s needs and be up and running in a few months.

Stressing that Iberia is considered an “energy island” due to the lack of electricity grid or pipeline connections with other European nations, he said: “Now, more than ever, Spain and Portugal are pushing for increased connections.”

The most important project on the table is the MidCat pipeline that would allow Spain to send natural gas and, later, hydrogen to France. Countries like Germany back the €3 billion ($2.94 billion) pipeline, but French President Emmanuel Macron has repeatedly dismissed it as unnecessary.

Costa Silva suggested, however, that the French stance may change as the country’s problems with nuclear energy have turned it into an energy importer.

“People can talk as much as they like, but then reality hits them,” he said in reference to Macron.