Morocco Lays Legal Basis for LNG Investments

A draft bill has been elaborated by the Moroccan government to back up its liquefied natural gas projects, as the north African Kingdom aims to bring the share of LNG to 13% of its energy mix by 2025.

The draft bill sets the guidelines for establishing a tariff system for a natural gas market that is still in its early stages in North Africa’s largest oil and gas importer.

The draft law is also aimed at encouraging foreign investors to set up LNG infrastructures, notably in terms of transmission and distribution networks.

LNG features prominently in Morocco’s energy transition, which is based on investing in renewable energy to cover 50% of Morocco’s energy needs by 2030. Morocco LNG projects aim at boosting its energy security and cutting dependence on Algerian gas. The Kingdom’s goal is to move from being a coal-dependent importer to a market in which clean energies and natural gas play an increasing role.

Investing in LNG will also help Morocco satisfy a rising domestic demand on electricity as the country is projected to consume 65 TW/h by 2025, i.e. a 6.2% increase compared to 2016.

The Moroccan LNG National Development Plan, approved in late 2014, features an LNG onshore terminal in Jorf Lasfar near El Jadida to be completed for a total cost of $4 billion.

The terminal will have a storage capacity of 5 billion cubic meters of LNG per year, a fitted marine jetty, regasification plants and new high-pressure gas transmission pipes.

Recently, Sound Energy made breakthrough with several exploitable gas discoveries in Eastern Morocco. The company said that the Kingdom will become a key player in the global gas map by 2019.

The latest natural gas discovery was made by British company, SDX Energy, as part of its well drilling campaign in the Sebou perimeter.

Few days ago, US media reports said that chief of the US Environmental Protection Agency (EPA) Scott Pruitt was in Morocco to “update” environmental cooperation under the US-Morocco Free Trade Agreement to include an option to supply the Kingdom with natural gas.

Last September, Russia’s Energy Minister Alexander Novak said Russian companies are interested in Morocco’s gas projects, particularly the liquefied gas terminal in Jorf Lasfar and the Moroccan-Nigerian gas pipeline.

The Russian minister revealed that negotiations are underway between Gazprom and Novatek and Morocco to secure LNG supply from Russia.

For its part, Qatar is also well placed to take part in the supply of the Jorf Lasfar gas terminal.

The new draft law on natural gas sector comes to provide the necessary legislative and regulatory framework to ensure the harmonious development of the sector in the country.

The text seeks to regulate and control these activities in terms of safety and environmental protection.

Moreover, a regulatory body under the name of the National Energy Regulatory Authority will be set up to ensure the regulation of the sector.

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