This Is The Fate Of Algerian Gas That Morocco Was Cutting Off
A reliable source in the energy sector told “Echorouk” that the national hydrocarbon company Sonatrach will revert to the free market, to sell the quantities of gas that Morocco used to deduct annually through the “Maghreb-Europe” pipeline, especially in light of the record prices of this vital substance in the spot market.
The source that Echorouk spoke to explained that Morocco was consuming between 600 and 800 million cubic meters annually of Algerian gas passing through the Maghreb-Europe pipeline, whose contract officially ended on the 1st of November 2021, and it was directed to produce electricity in two gas-operated stations, which are among the largest in the country.
The same source pointed out that the quantities that Morocco consumed annually, i.e. more than 600 million cubic meters, will be directed towards the free market and not within long contracts, noting that prices within the free market have become very attractive in light of the global gas crisis, where the price of one million Btu cost $50 weeks ago in Europe.
From this point of view, our source asserted that the quantities that were destined to Morocco will be additional marketing shipments for Sonatrach, and the global gas market must be exploited and offered for sale in the free market and benefit from better prices than was the case previously by directing them to Morocco.
As it is known, most gas contracts are considered long-term, meaning that gas prices are linked to the level of oil. The higher the crude, the higher the prices, and vice versa, while the quantities offered for sale in the free (spot) market remain limited, as recently confirmed by the CEO of the Sonatrach energy group Tewfik Hakkar.
On Sunday, October 31, the President of the Republic, Abdelmadjid Tebboune, ordered the national company Sonatrach to terminate the gas contract with Morocco and not to renew it.
According to Spanish Government sources who spoke to “El Pais” newspaper, about 48 Algerian, Spanish and chartered vessels will ensure the delivery of LNG shipments to various Spanish ports, in addition to the additional capacities of the Medgaz pipeline, which will be operational within weeks. Annually it reaches a capacity of 10.6 billion cubic meters.
According to the calculation data of the Spanish Inland Gas Network Management Company “Enagas”, Algeria will supply Spain with 3 billion cubic meters annually of gas via ships in each liquefied natural gas “LNG”, while the remaining quantities will be guaranteed to the Spanish and Portuguese market via the Medgaz pipeline which will reach a capacity of 10.6 billion cubic meters within weeks.
A picture of the Spanish company “Enagas” showed that the Kingdom’s internal gas network was devoid of any supplies through the Maghreb-Europe pipeline, which was officially stopped at midnight on Sunday to last Monday.