0 - Highlights

The energy sector is ending a transition period from public to private ownership and from monopoly to competition.
The newly elected government has undertaken several market reforms in the energy sector as follows:
- Implementation of Third Party Access in oil and natural gas transport;
- Agreement between the Government and the main electricity utilities on the liberalization of the electricity market;
- Negotiations with the different parties involved on the reform of coal subsidies;
- Further privatisations of public energy enterprises have been decided: they include Repsol, the oil company, Endesa, the electricity company and Enagas-Gas Natural.

In August 1996, two main changes in the administrative structure dealing with energy were implemented:
- The General Secretariat of Energy and Mineral Resources became a Secretariat of State of Energy and Mineral Resources.
- A Ministry for Environment was created. Previously, environmental issues were under the jurisdiction of the Ministry of Public Works, Transport and Environment.

The current Spanish policy promotes increased use of natural gas. Gas consumption is expected to more than double by the year 2000 (compared to 1995 statistics), and by 2015 it may have doubled once more. It is mainly the use of gas for power generation which will contribute to the expected increase of gas consumption.

The first phase of the Maghreb-Europe Gas Pipeline project was completed in December 1996. In addition to constituting a new route for natural gas to the European markets, this infrastructure takes on the role of a decisive and valuable instrument for the economic integration and the socio-cultural alignment of the European Union and the countries of the Maghreb.
In addition to Enagas, which managed the Spanish stretches and the Straits of Gibraltar, the Portuguese company Transgas, the Algerian Sonatrach and the Moroccan SNPP and Metragas (a subsidiary of Enagas) participated in its construction.

The Maghreb-Europe Gas Pipeline will come to transport around 10 Bcm of natural gas per year of which the Spanish energy market will absorb 6 Bcm million cubic metres and the Portuguese, 2,5 Bcm.

Algeria is current major -LNG exporter to European countries and is main supplier to Spain. After the completion of the Maghreb-Europe pipeline, Spain started to import natural gas from Algeria in the end of the year 1996. Part of the Algerian gas is dedicated to the electricity industry.

An agreement was reach in 1997 for the acquisition of the 9% of the Enagas equity which was still in the hands of the Sociedad Estatal de Participaciones Industriales (SEPI), by which Gas Natural achieved full ownership of this company.