GME gas pipeline: Algeria to stop supplying Morocco

[CEZAYIRLI]

Gazoduc GME : l’Algérie cessera d’approvisionner le Maroc

Plus que 5 jours et le gazoduc Maghreb-Europe (GME), qui alimente la péninsule ibérique en gaz algérien via le Maroc, cessera officiellement de fonctionner.

www.tsa-algerie.com

GME gas pipeline: Algeria to stop supplying Morocco
Economy By: Redaction Oct. 26, 2021 at 2:08 PM

More than 5 days and the Maghreb-Europe (GME) gas pipeline, which supplies the Iberian Peninsula with Algerian gas via Morocco, will officially cease to operate.

Algeria's decision not to renew its operating contract, which expires on October 31, has just been confirmed to Reuters by "three sources with direct knowledge of the matter", two government officials and one within of Sonatrach.

Several Algerian sources had expressed throughout the summer of Algiers' intention not to renew the contract, in reaction to the "hostile acts" and "provocations" of Morocco which led to the breakdown of diplomatic relations between the two. country on August 24.

The decision was in the air even before the relationship broke. On August 21, Algerian sources had qualified as "lies" the words of Amina Benkhadra, director of the Moroccan hydrocarbons office, who reported a few days earlier of the will of her country to keep the gas pipeline functional beyond of October 31, 2021.

The statement came as Morocco had kept the issue in suspense for months, amid tensions with Algeria and Spain.

The option of not renewing the contract became clearer from week to week, over the exits of senior Algerian officials, including the Minister of Energy, Mohamed Arkab, who each time put forward the alternative of building capacity. of the other gas pipeline which connects Algeria to Spain, without going through Morocco, the Medgaz.

Operational since 1996, the GME gas pipeline has a capacity of 13.5 billion cubic meters and supplies Spain, Portugal and Morocco.

The bulk of its deliveries are destined for Spain, with an annual volume of just under 10 billion m3. Morocco draws about one billion cubic meters from this pipeline intended to produce 10% of its electricity, in addition to nearly $ 60 million in rights of way per year.

According to Reuters, Algeria will stop supplying Morocco from November 1 but will continue to deliver its gas to Spain via Medgaz, whose capacity, currently estimated at 8 billion M3, will be increased to 10.5 billion before the end of November.

On October 10, President Abdelmadjid Tebboune indicated that no decision has been taken on the renewal of the GME contract, while asserting that Algeria will stop supplying Spain through its gas pipeline.

"Spain reassured"
The head of state had opened a door to possible negotiations with Morocco to supply him with Algerian gas. The decision to shut down the GME means that these talks are not taking place, or they have failed. Amid high tensions between the two countries, it is highly unlikely that he will discuss gas deliveries.

The British agency reports experts' concerns about the possibility of the energy crisis in Spain worsening "at a time when gas bills are skyrocketing across Europe" and this, due to "problems techniques related to Algerian projects to extend the capacity of the Medgaz gas pipeline ”.

Citing a fourth source, "a senior Algerian government official," Reuters reports that in the event of a disruption, Algeria "would use ships to transport liquefied natural gas (LNG) to Spain".

“Analysts say this would mean Sonatrach would have to charter more ships, fueling further increases in LNG prices as shipping rates more than doubled from earlier this month,” the agency wrote.

But even before officially announcing its decision, Algeria reassured the Spanish partner on several occasions. On August 26, the Minister of Energy received the Spanish Ambassador to Algeria, Fernando Morgan, and assured him of "Algeria's total commitment to cover all of Spain's supplies. in natural gas through Medgaz ”.

On September 30, Spanish Foreign Minister Jose Manuel Albares Bueno said he was "reassured" after a visit to Algiers where he met with President Abdelmadjid Tebboune.

“Algeria is a major energy partner for Spain. It has also always been a reliable partner who has honored its commitments. I was reassured today about the continuity of supply, "said the Spanish foreign minister. Algeria is Spain's leading energy partner, which supplies it with 50% of its gas needs.

Morocco is said to be considering reversing the flow of the pipeline, that is to say, to bring regasified gas from Spain. An option that an Algerian source described as costly and impractical, assuring on October 12 on TSA that "the GME will be a huge didgeridoo on Moroccan territory".