Page 4 - AfrElec Week 46 2021

AfrElec COMMENTARY AfrElec

Morocco’s gas and power woes

Against the backdrop of tight gas markets in Europe, Morocco

has lost access to gas from Algeria, its main supplier

MOROCCO GLOBAL natural gas markets have become rising because of the Moroccan government’s
increasingly tight this year, largely because the alleged support for the Movement for the
world economy has started to regain the ground Autonomy of Kabylie, an ethnic Berber group
WHAT: it lost as a consequence of the coronavirus demanding the right to self-governance in Kab-
Morocco is no longer (COVID-19) pandemic. This tightness has been ylie province. They have also charged Morocco
receiving 6 bcm per evident in Europe, where gas markets have taken of complicity in the wave of forest fires that swept
year of gas via the GME a strongly bullish turn because of concerns about northern Algeria in early August of this year, kill-
pipeline. high prices and low supplies. ing more than 90 people.
However, Europe is not the only gas market Morocco’s government, for its part, has
WHY: that has come under pressure within the last few charged Algeria with backing the Polisario
Algeria has cut off weeks. Morocco is also likely to experience sup- Front, a group formed to establish Western Saha-
supplies in response ply problems this heating season, but for very ra’s independence from Morocco. Officials in
to ongoing diplomatic different reasons. Rabat have also been responding more harshly
disputes. This essay will seek to explain why Morocco to Algiers’ claims since they secured the US gov-
may be headed for gas shortages and assess the ernment’s pledge to support the Moroccan claim
WHAT NEXT: likely impact of recent developments. to sovereignty over Western Sahara in exchange
The country aims to for the normalisation of relations with Israel.
start importing LNG Algeria, Morocco and Europe
and boosting domestic Europe’s current supply/demand situation stems Algeria’s promises to Europe
production, but these in no small part from the fact that Russia, which In the run-up to the shutdown of the GME pipe-
plans will not come to is the Continent’s largest external supplier of line, Algeria’s government did try to assuage
fruition any time soon. gas, has been limiting deliveries. However, two Spain’s concerns about possible gas shortages.
European states, Spain and Portugal, are com- Specifically, officials in Algiers pledged last
ing under additional pressure for an unrelated month to compensate Spanish buyers for the loss
reason. of the 6 bcm per year delivered via GME. They
The extra pressure stems from Algeria’s said they would raise the throughput capacity of
decision to halt shipments through Gas Magh- another pipeline – Medgaz, which passes only
reb-Europe (GME), a 12bn cubic metre per year through Algerian territory on its way to Spain
pipeline that delivers 6 bcm per year to the Ibe- – from 8 bcm per year to 10.5 bcm per year and
rian Peninsula and 6 bcm per year to Morocco. also deliver LNG cargoes by tanker if necessary.
Algiers stopped pumping gas through GME on These promises won’t help Rabat, however.
November 1, 2021, following the expiration of its Algeria appears to have no interest in discussing
25-year transit agreement with Rabat. the matter with Morocco, so GME is not likely to
That agreement had provided for Morocco to resume operations any time soon. As such, the
receive about 6 bcm per year of gas from Hassi Moroccan gas market is set to remain tight for
R’Mel, a field in Algeria’s Laghouat province, in the time being.
exchange for hosting a 522-km section of GME.
Once Algeria let the accord lapse with renewal, Domestic gas production
though, gas deliveries stopped. In the longer term, there are other supply
options.
Rising tensions On the one hand, Morocco is trying to
This halt is unfortunate for Morocco, as the GME develop its domestic gas resources. The country’s
system had been supplying enough gas to fuel proven gas reserves amounted to 50bn cubic feet
thermal power plants (TPPs) that produce about (1.42bn cubic metres) as of 2017, but the number
10% of the country’s electricity. However, it was is expected to rise as the exploration campaigns
not exactly surprising in light of the fact that being carried out by international oil companies
relations between Algiers and Rabat have been (IOCs) move forward.
deteriorating over the last few years. Martin Sherriff, the head of Welligence
Algerian officials allege that tensions are Energy Analytics’ Middle East and North Africa

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