Algiers cuts gas in Rabat

It is a new tightening imposed by Algiers in relations with its Moroccan neighbor. Algiers unilaterally decided not to renew the transit contract for the Maghreb-Europe (GME) gas pipeline. This pipeline supplies Spain via Morocco, which, by the way, receives 7% of the volumes. Clearly, Algiers closes the valves on the 1,400-kilometer-long gas pipeline that crosses Morocco for 540 kilometers, passes through the Strait of Gibraltar until it reaches Spain in Cadiz. Each year, 10 billion m³ of gas travels this way.

The contract ended on October 31st. If no explanation is given by the Algerian authorities, the Algerian newspaper website Freedom I want to see “probably the first consequence of the break in diplomatic relations between the two countries”.

It is undoubtedly a heavy blow to the Moroccan economy, which has few natural resources and whose gas supply is ensured by the GME, in other words, around 700 million m³. To guarantee the continuity of the contract with Spain, which is the same client, Algiers intends to pass through another gas pipeline, Medgaz, which runs directly under the Mediterranean and reaches Almeria. Commissioned in 2011, it has an annual transport capacity of 8 billion m³ of gas.

Medgaz has a great advantage: connected directly from the producer to the consumer, passing through the seabed, the pipeline does not generate any transit fees, unlike the GME. But its capacity is already at its maximum and it is difficult to imagine how it could absorb the 10 billion m³ of gas that pass through Morocco. Medgaz, in its current structure, can no longer transport. It is necessary to increase the power of the compressor stations to increase the flow of the pipeline. An expansion to increase from 8 to 10.5 billion m³ is in progress. According to media 24 , it would take five years to reach 15 billion m³.

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And anyway, that won’t cover the GME closure. Thus, underlines media 24, “the geopolitical game would prevail over any economic logic”. And this, at the end of August, said the Algerian Minister of Mines and Energy, Mohamed Arkab, according to the official news agency APS, “Algeria’s total commitment to cover all of Spain’s natural gas supplies through Medgaz”. To offset the gas supplied to Spain by GME, it will therefore have to increase this share in Medgaz at the expense of other European customers.

According to the newspaper Freedom, Algeria pays US$58 million in right of way to Morocco for gas. It’s certainly nothing for the budget, but it’s not crippling either. This charge is made in the form of gas, mainly intended for the production of electricity.
This stoppage of Algerian deliveries occurs during prospecting starts at the end of the year in Morocco at the Anchois deposit near Larache, a city in the north between Rabat and Tangier. A promising deposit estimated at a billion billion m³.
Suffice it to say that Morocco will likely not need Algerian gas any longer. Assuming this pipeline closure is not just an untracked ad effect. Another chin jab from Algiers against Rabat.

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