Shell, Morocco sign LNG supply agreement

Morocco’s electricity and water utility ONEE signed a deal to buy from Shell 0.5 billion cubic meters of liquified natural gas (LNG) over 12 years in a push to increase the share of natural gas in its energy mix, Morocco’s ministry of energy transition said.

In the first years, the LNG will be supplied via the Spanish ports and shipped to Morocco through the Maghreb-Europe Pipeline, the ministry said in a statement.

The gas will be delivered later to future Moroccan LNG terminals, it said, noting that the contract is in line with Morocco’s decarbonation goals.

“The Kingdom of Morocco entered the international LNG market for the first time in 2022, thanks to consistent cooperation and trust with our neighbors. This medium-term supply contract will increase our energy security, enhance energy affordability and pave the way for a more ambitious decarbonization strategy.” Energy transition minister Leila Benali was quoted in the statement as saying.

Speaking on the same occasion, head of ONEE Abderrahim El Hafidi said the agreement represents “ONEE’s first medium-term LNG purchase contract on the international market.”

“This agreement will enable us to meet part of our needs and guarantee the supply of natural gas to our power stations. Natural gas is now a major component of our electricity mix because it offers the flexibility needed to offset the massive introduction of renewable energies into our electricity system,” he said.

Mehdi Chennoufi, Head of Global Origination, Shell LNG Marketing and Trading, said “we are delighted to work with ONEE and supply LNG to the Kingdom of Morocco to help meet the country’s demand for gas. LNG offers a flexible and reliable source of energy and has a crucial role to play in the energy transition.”

The deal will give a new life to the Maghreb-Europe pipeline after it was suspended in a hostile move by Algeria in 2021.