Page 8 - DMEA Week 47 2021

DMEA COMMENTARY DMEA

Morocco’s government, for its part, has has been assigned to Sound Energy, while Lalla
charged Algeria with backing the Polisario Mimouna Sud and Moulay Bouchta Ouest are
Front, a group formed to establish Western Saha- being developed by SDX Energy. Meanwhile,
ra’s independence from Morocco. Lixus, the offshore block that includes the
Officials in Rabat have also been respond- Anchois gas field, is held by Chariot Oil & Gas.
ing more harshly to Algiers’ claims since they All three of these companies are based in the
secured the US government’s pledge to support UK.)
the Moroccan claim to sovereignty over Western
Sahara in exchange for the normalisation of rela- FSRUs for LNG imports
tions with Israel. On the other hand, Morocco is considering the
possibility of using floating storage and regasifi-
Algeria’s promises to Europe cation units (FSRUs) to import gas in the form of
In the run-up to the shutdown of the GME pipe- LNG. According to Sherriff, the North African
line, Algeria’s government did try to assuage state might be able to start receiving gas in this
Spain’s concerns about possible gas shortages. fashion a few years down the road.
Specifically, officials in Algiers pledged last “In the longer term, gas shortages could
month to compensate Spanish buyers for the loss be filled [with] imported LNG,” he said.
of the 6 bcm per year delivered via GME. “[US-based] Predator [Oil & Gas] has submitted
They said they would raise the throughput a bid to build a floating LNG [FLNG] regasifica-
capacity of another pipeline – Medgaz, which tion terminal with an initial capacity of 110mn
passes only through Algerian territory on its cubic feet [3.12mn cubic metres] per day by
way to Spain – from 8 bcm per year to 10.5 bcm 2025, rising to 170 mmcf [4.81 mcm] per day in
per year and also deliver LNG cargoes by tanker 2030 and 300 mmcf [8.5 mcm] per day in 2040.”
if necessary. Hamish Kinnear, a Middle East and North
These promises won’t help Rabat, however. Africa analyst for Verisk Maplecroft, also high-
Algeria appears to have no interest in discussing lighted the potential of FSRUs as a possible solu-
the matter with Morocco, so GME is not likely to tion for Morocco in the years to come. “Morocco
resume operations any time soon. As such, the could construct LNG terminals or bring in float-
Moroccan gas market is set to remain tight for ing storage [and] regasification units (FSRU) to
the time being. import gas normally supplied through GME,” he
told NewsBase.
Domestic gas production Kinnear indicated that he believed Rabat was
In the longer term, there are other supply keen on the FSRU option, referring to Moroc-
options. co’s Minister of Energy Transition and Sustain-
On the one hand, Morocco is trying to able Development Leila Benali’s statements on
develop its domestic gas resources. The coun- November 8 about plans to prepare local ports
try’s proven gas reserves amounted to 50bn cubic for incoming LNG shipments. “Tangier may be
feet (1.42bn cubic metres) as of 2017, but the a possible location for an FSRU,” he remarked.
number is anticipated to rise as the exploration Like Sherriff, he said he saw FSRUs as a
campaigns being carried out by international oil longer-term option that was not quite viable yet.
companies (IOCs) move forward. Morocco’s gas needs are likely to remain rela-
Martin Sherriff, the head of Welligence tively modest for the time being, and the coun-
Energy Analytics’ Middle East and North Africa try can switch to other types of fuel in the short
(MENA) group, drew attention to several ongo- term, he stated. “Morocco is able to import more
ing Moroccan upstream projects. “Indigenous oil and coal and utilise existing spare capacity at
sources of gas such as the Tendrara-5 Horst, Lalla other power plants ... [There] are increased costs
Mimouna Sud, Moulay Bouchta Ouest and Lixus for Morocco with the end of Algerian supply,
projects could also increase long-term domestic but it’s a major inconvenience, not an existential
gas production,” he told NewsBase. (TE-5 Horst issue for its energy supply,” he said.™

P8 www. NEWSBASE .com Week 47 25•November•2021