Morocco’s Revenues From Algerian Gas Rise To $ 64 Million

Morocco’s revenues from the transit of Algerian gas to Europe through the Kingdom rose by 52% in the first four months of 2018 compared to the same period of 2017, benefiting from the higher fuel prices in world markets in recent months.

According to the figures that were released by Morocco’s public treasury, and were published in the newspaper “Al Arabi Al Jadid”, the revenues of the transit of Algerian gas to Morocco amounted to about 64 million dollars in the period from January to April, compared to 42 million dollars in the same period of 2017.

Morocco’s share of Algerian gas is expected to exceed what the government bet on this year’s budget, which amounts to about 121 million dollars, compared with 101 million dollars last year.

The gas pipeline “Maghreb-Europe” started working in 2002, and about 12 billion cubic meters of Algerian gas are exported annually to Europe via Morocco.

Value of revenues for Morocco is affected by the price of gas in the international market, with revenues in 2004 reaching about $ 240 million, according to official data.

According to the same source, there is uncertainty about the continuation of the work of this pipeline, where the contract that regulates this pipeline to the end of 2021 is in effect, but will it be renewed after that date, as the Moroccan Ministry of Energy and Minerals indicated to the possibility of occurrence, asserting that there are alternatives in case of non-renewal of the contract, especially as Morocco gets an in-kind share of gas that is equivalent to the value of transit fees.

The future of the pipeline remains a matter of negotiations between Algeria, Spain and Portugal, and whether it will lead to the renewal of the contract, which expires four years later or at the end of that project.

If the contract is not renewed between Algeria and the Europeans, Morocco will have the right to exploit the pipeline, which will become its property, and will therefore be included in the Kingdom’s gas plan and it can be used to import gas from Europe, according to previous statements of the Energy Minister, Aziz Rabbah.

Algeria has two other pipelines to transport gas to Europe, prompting the Moroccan economist, Omar Fattouaki, to speculate that the contract between Algeria and Portugal and Spain will not be renewed.

Algeria ranks third among the EU’s top gas suppliers after Russia and Norway, but its export capacity across three pipelines is stretching across the Mediterranean and is largely underutilized.

In 2013, the EU estimated that Algeria exported 25 billion cubic meters of natural gas via the pipelines to Spain and Italy, which is less than half its export capacity of 54 billion cubic meters, while it exported 15 billion cubic meters of liquefied natural gas from Energy of 40 billion cubic meters.

In addition to the possibility of not renewing the contract for the export of gas to Portugal and Spain through the pipeline through Morocco, the Minister of Economic Development, Carla Calinda, said in statements to local media in April that his country will not renew the contract to import gas from Algeria through the pipeline that is linking the two countries, after the end of next year 2019.