Page 5 - AfrOil Week 18 2022

AfrOil COMMENTARY AfrOil

Last autumn, though, Sonatrach informed its LNG terminals, arguing that such an arrange-
Rabat that it did not intend to renew the deal ment would violate the destination clauses of the
after it expired on October 31, 2021. Sonatrach supply deal that prohibit re-export.
Algeria’s government explained its decision For its part, Spain has said it can guarantee that
by complaining that Morocco had been back- no Algerian gas will be diverted to Morocco via
ing the Movement for the Autonomy of Kabylie, the GME as a result of the deal.
an ethnic Berber group demanding the right
to self-governance in Kabylie province. It also EU eyes new energy suppliers
reiterated claims that Morocco had been com- As for the rest of Europe, officials in Brussels
plicit in a wave of forest fires that swept northern had hoped to see conditions improve across the
Algeria the previous August, killing more than bloc after the start of the new year, with concerns
90 people. about prices and supplies easing as spring drew
Moroccan officials responded, in turn, by closer.
charging that Algiers was supporting the Polis- Instead, EU energy markets have come under
ario Front, a group formed to establish Western even more pressure in 2022. Oil and gas prices
Sahara’s independence from Rabat. These allega- rose as Russian military forces gathered near the
tions helped fuel tensions that had already been Ukrainian border, and they shot upward once
building in the months following the US gov- the war began on February 24.
ernment’s pledge to support Morocco’s claim to Since then, the war in Ukraine has raised
sovereignty over Western Sahara in exchange for questions about the advisability (and even the
the normalisation of relations with Israel. ethics) of the EU’s continued dependence on
The most immediate consequence of Russian energy supplies. Those questions, in
Sonatrach’s decision not to renew the transit turn, have led Brussels to debate the aforemen-
agreement was the suspension of Algerian gas tioned proposals for prohibiting the importation
flows to Spain via GME. But this development of Russian oil and gas. They have also led many
did not occur in isolation. It happened at a time European officials to look for alternative sources
when gas supply concerns were widespread of fuel and tout the merits of various geographic If the EU stops
throughout the EU – and when Russia, the EU’s regions – especially North Africa and sub-Saha- buying gas from
single largest source of gas, was declining most ran Africa, which have the advantage of relative
of its European buyers’ requests for additional geographic proximity to the Continent. Russia and turns
volumes. As a result, it helped cause Spanish gas Just this week, for example, Bloomberg
and electricity prices, which were already very reported that it had viewed a draft EU docu- to another part of
high, to go even higher in the final quarter of ment saying that Brussels intended to expand
2021. co-operation with African states as part of a plan the world, it won’t
to reduce imports of Russian gas by two thirds just be swapping
Spain seeks to aid Morocco before the end of this year. West African coun-
After cancelling the transit agreement, tries such as Senegal, Nigeria and Angola have one commercial
Sonatrach did try to assuage Spain’s supply significant potential as future suppliers of LNG
concerns by pumping more gas to the Iberian and could become important sources of fuel for partner out for
Peninsula through a separate pipeline – Medgaz, the European market, the news agency cited the another
which runs directly from Algeria to Spain across document as saying.
the Mediterranean seabed. It also talked about But it bears remembering that these coun-
sending more LNG to Spain by tanker. tries are more than just reservoirs of fuel waiting
However, it does not appear to have fully for buyers. These gas-producing states – both
made up for the loss of the 6bn cubic metres current producers, such as Nigeria and Angola,
per year delivered to Spain via GME – and it and future producers such as Senegal – have
certainly did not compensate Morocco for the their own histories and their own sensitivities.
smaller volumes it had been receiving in transit.
As a result, both Spain and Morocco have been New suppliers, new complications
on the lookout for additional gas supplies. And those sensitivities have an unfortunate ten-
Initially, Madrid and Rabat searched for dency to come to the forefront when stakes are
gas separately, with the Spanish side seeking high. The case of Algeria, Morocco and Spain
out LNG cargoes on the world market and the makes this tendency clear.
Moroccan side working to speed up plans for The tensions in play between these three
developing domestic gas reserves and install countries have not gone away since last autumn,
floating storage and regasification units (FSRUs) and they have certainly not been overshadowed
in order to facilitate LNG imports. by the larger-scale crisis that has erupted over
In recent months, though, they have joined Ukraine. Instead, they have continued to sim-
forces. Spain has pledged to assist Morocco by mer, and as of press time, the disputes between
letting the latter country import LNG via its the parties remained unresolved.
own import terminals and then use the GME What this means is that if the EU stops buy-
pipeline in reverse mode to transport gas from ing oil and gas from Russia and turns to another
Spanish territory to the Moroccan market. part of the world, it won’t just be swapping one
This pledge, in turn, has drawn the ire commercial partner for another. It will also be
of Algiers, which remains dissatisfied with taking on a new set of complicating factors –
Madrid’s policy on Western Sahara. Algeria has and it ought to learn those risks and understand
criticised Spain for offering Morocco access to them as much as possible before it does so. ™

Week 18 04•May•2022 www. NEWSBASE .com P5