Rabat, Madrid foil Algeria’s gas blackmail
When Algeria unilaterally cut gas supplies through the Maghreb-Europe gas pipeline in late 2021, it was expecting Morocco to succumb to darkness and electricity cuts. But none of that happened. Instead, a new energy partnership was forged with Spain giving the halted pipeline a new life.
Spain received annually 2 million euros from Morocco for the reversal of the pipeline which carries American LNG stored in Spanish terminals to small power stations in northern Morocco, according to Spanish media The Objective.
Morocco pays other expenses relating to storage and transport of the LNG. Previously, Morocco’s energy minister Leila Benali had explained that Morocco will make its own orders and use Spanish terminals until it builds its own regasification units.
Gas exports to Morocco have increased 821% in the second half last year, it said, as Morocco and Spain both welcomed the reversal of the flow as a symbol of a strengthened partnership.
Algeria has not shed away from weaponizing gas to reach diplomatic goals and has threatened to halt supplies to Spain altogether after the latter recognized Morocco’s autonomy plan for the Sahara.
In doing so, Algeria projected an image of a rogue state whose standing as a reliable gas supplier is recalled into question.
While the quantities it received from Algeria kept decreasing, Spain turned to US, Nigerian and also Russian gas.
Decreasing Algerian gas sales
The Algerian government has indulged in telling half-truths by focusing on value of gas exports instead of the volume which has dropped 10% to 49.3 billion cubic meters in 2022, down more than 5 bcm in 2021.
The drop confirms forecasts that Algeria- which already lost its status as an oil country- will lack capacity to export gas in next decade due to a surging domestic consumption on the back of high demographic growth and over reliance on gas for electricity production.
Half Algeria’s 100 cbm production went to the domestic market in 2022, a year which saw exports value reach 50 billion dollars.
But even with higher prices in 2022, Algeria fell short of matching its 71 billion dollars of gas exports in 2011 when the country produced 145 cbm.
The dire truth that Algerian officials seek to hide is that the country’s production capacity is decreasing while its domestic needs of gas are increasing while dependence on hydrocarbons keeps the economy hostage.
