Spanish gas grid operator reduces shareholder dividends to bolster balance sheet for hydrogen pipelines




Enagás plans to tap subsidies for at least 40% of the cost of the multi-billion-dollar Spain-France H2 link


Enagás, Spain’s gas grid operator, has slashed its shareholder payouts over the next three years by more than 42%, in order to boost its balance sheet for its planned investment into major hydrogen pipeline infrastructure.


H2Med, a proposed €2.5bn ($2.7bn) pipeline linking up hydrogen supply in Portugal and Spain to demand in France and Germany, was included in the European Commission’s sixth list of Projects of Common Interest, which if approved would accelerate permitting and allow access to subsidies through the Connecting Europe Facility (CEF).


Enagás has confirmed in a results update published yesterday (Tuesday) that it plans to tap CEF funds for development studies this year and, in 2026, apply for additional funding for construction.


However, it also noted that public funding will only cover around 40% of the cost of BarMar, H2Med’s subsea link between Spain and France, with the remaining 36% of project finance to come from debt and 24% from equity.


As such, the Spanish gas grid operator has cut its shareholder dividend down from €1.74 per share in 2023 to €1 from 2024 to 2026 to bolster its balance sheet ahead of a final investment decision (FID).


The company also expects its net profit to fall from €342.5m in 2023 to between €260m and €270m in 2024, although its net debt will only grow an extra €100m this year from the €3.3bn it ended last year with.


H2Med’s construction is expected to run from 2027 to 2029, with operations scheduled to begin in 2030. Enagás has calculated that €1bn of the €2.5bn cost will be invested in Spain.


At the end of last month, Enagás announced the results of its call for interest from potential industrial hydrogen producers and users to link up to pipeline infrastructure, which suggested a maximum 7.9 million tonnes of H2 made in Spain compared to only 1.4 million tonnes of demand.


The Spanish gas grid operator expects that €4.9bn of investment will be needed to build out a hydrogen pipeline network in the country.


The government had in December designated Enagás the provisional manager of the Spanish Hydrogen Backbone, with a 29 April deadline for the company to submit a ten-year proposal for the deployment of this infrastructure.



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