MADRID, June 25 (Reuters) - Spanish natural gas grid

operator Enagas signed on Tuesday an agreement with

French counterparts GRTgaz and Terega, setting the terms for

developing a planned multi-billion-euro underwater pipeline to

carry hydrogen between Spain and France.

The countries are investing in hydrogen as part of Europe's

transition to a low-carbon-emission economy. The pipeline, known

as BarMar, is expected to cost 2.5 billion euros ($2.67

billion). It is part of a broader plan for hydrogen

infrastructure from the Iberian peninsula to France and on to

Central Europe, called H2MED.

The agreement sets terms for feasibility studies about the

pipeline, conditions for the final investment decision and the

creation of a company to potentially develop the project, Enagas

said.

Under the deal, the Spanish firm will hold a 50% stake of

the company, with GRTGaz and Terega holding 33.3% and 16.7%

respectively.

The agreement was also signed by German gas grid operator

Open Grid Europe (OGE), which last year joined its French,

Spanish and Portuguese peers working to develop the H2MED

project.

Enagas also signed an agreement with Portugal's gas grid

operator REN strengthening their partnership to develop a green

hydrogen pipeline in the Iberian peninsula.

($1 = 0.9347 euros)