NATO is trying to revive plans for a pipeline connecting Catalonia, Spain and France, according to Spanish government sources with Germany said to be “very interested” in the project.

Spanish newspaper La Vanguardia reported on Sunday that construction of the project would be used to transfer around seven billion cubic metres of natural gas per year from Algeria along with foreign liquefied natural gas (LNG) shipments.

Citing an anonymous government source, the report says that the proposal is on Nato’s “working table” and involves eight LNG plants in Spain and Portugal.

The proposed pipeline is under serious consideration and aims to reduce Europe’s reliance on Russian natural gas, which accounts for about 40 per cent of its supplies.

Last week Nato chief Jens Stoltenberg called for Europe to diversify its oil suppliers as the alliance ratchets up tensions with Russia.

“We are concerned about the energy situation in Europe because it demonstrates the vulnerability of being too dependent on one supplier of natural gas, and that’s the reason why Nato allies agree that we need to work and focus on diversification of supplies,” he said last Sunday.

The proposed Nato pipeline, known as Midcat, is not new, but was rejected by Spanish and French regulators three years ago as potentially unprofitable due to European aims to reach net zero carbon emissions by the middle of the century.

Europe faces a serious energy crisis with severe shortages and rocketing prices, having dipped into reserves last year.

Russia’s Nord Stream 2 project has been put on hold despite being completed in September last year. President Vladimir Putin insists that the pipeline, which bypasses Ukraine, can ease shortages and lower European prices.

But the US has threatened to block Nord Stream 2 in the event of Russian aggression against Ukraine, something the US says is imminent but Moscow denies contemplating.

Last week, US sales of LNG to Europe hit record highs, accounting for two-thirds of its supplies in January.

US companies are seen as the main potential beneficiaries should the Nord Stream 2 project collapse.