Morocco to Renew Gas Supply Deals with Algeria

Algeria will continue to supply gas to Morocco through the Maghreb-Europe pipeline as the two countries prepare to renew a contract that will expire in 2021, Algerian Energy Minister Mustapha Guitouni told Reuters.

Morocco will take full ownership of the pipeline that channels gas to Spain in 2021, the Algerian minister said following talks with Morocco’s Energy Minister Aziz Rabbah in Marrakech on the sidelines of the 11thArab Energy Conference.

The 1300 km pipeline, currently owned by Spain, channels gas from the Algerian field of Hassi R’mel to Spain.

Morocco receives royalties for the pipeline worth 0.5 billion cubic meters of gas, representing half the country’s consumption.

The Algerian and Moroccan press had speculated that the agreement may not be renewed as Algeria prepares a direct pipeline to export gas to Spain without going through Morocco.

Significant discoveries in Tindrara by Sound Energy as well as Morocco’s renewable energy plan and its project to build an LNG gas terminal have also led to speculations that the country may do without Algerian gas.

The Moroccan LNG project is part of efforts to diversify the country’s energy mix and autonomy. The project includes two new combined-cycle gas turbine power plants, each with a capacity of 1200 MW, an LNG terminal and onshore regasification unit at the Port of Jorf Lasfar as well as pipelines connecting the terminal to the Maghreb-Europe pipeline.

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

Morocco, which imports most of its energy needs, seeks to reduce its dependency on imported fossil fuels, with plans aimed at bringing the share of LNG to 13 pc of its energy mix by 2025 and generating over 50 percent of its energy from renewables by 2030.