Page 5 - AfrOil Week 46 2021

AfrOil COMMENTARY AfrOil

However, it was not exactly surprising in light of ongoing Moroccan upstream projects.
the fact that relations between Algiers and Rabat “Indigenous sources of gas such as the Ten-
have been deteriorating over the last few years. drara-5 Horst, Lalla Mimouna Sud, Moulay
Algerian officials allege that tensions are Bouchta Ouest and Lixus projects could also
rising because of the Moroccan government’s increase long-term domestic gas production,” he
alleged support for the Movement for the told NewsBase. (TE-5 Horst has been assigned
Autonomy of Kabylie, an ethnic Berber group to Sound Energy, while Lalla Mimouna Sud and
demanding the right to self-governance in Kab- Moulay Bouchta Ouest are being developed by
ylie Province. They have also charged Morocco SDX Energy. Meanwhile, Lixus, the offshore
of complicity in the wave of forest fires that block that includes the Anchois gas field, is held
swept northern Algeria in early August of this by Chariot Oil & Gas. All three of these compa-
year, killing more than 90 people. nies are based in the UK.)
Morocco’s government, for its part, has
charged Algeria with backing the Polisario FSRUs for LNG imports
Front, a group formed to establish Western On the other hand, Morocco is considering the
Sahara’s independence from Morocco. Offi- possibility of using floating storage and regasifi-
cials in Rabat have also been responding more cation units (FSRUs) to import gas in the form of
harshly to Algiers’ claims since they secured the LNG. According to Sherriff, the North African
US government’s pledge to support the Moroc- state might be able to start receiving gas in this
can claim to sovereignty over Western Sahara in fashion a few years down the road.
exchange for the normalisation of relations with “In the longer term, gas shortages could
Israel. be filled [with] imported LNG,” he said. Morocco might
“[US-based] Predator [Oil & Gas] has submitted be able to start
Algeria’s promises to Europe a bid to build a floating LNG [FLNG] regasifica-
In the run-up to the shutdown of the GME pipe- tion terminal with an initial capacity of 110mn using FSRUs
line, Algeria’s government did try to assuage cubic feet [3.12mn cubic metres] per day by
Spain’s concerns about possible gas shortages. 2025, rising to 170 mmcf [4.81 mcm] per day in to import LNG
Specifically, officials in Algiers pledged last 2030 and 300 mmcf [8.5 mcm] per day in 2040.”
month to compensate Spanish buyers for the loss Hamish Kinnear, a Middle East and North a few years
of the 6 bcm per year delivered via GME. They Africa analyst for Verisk Maplecroft, also high- down the road
said they would raise the throughput capacity of lighted the potential of FSRUs as a possible solu-
another pipeline – Medgaz, which passes only tion for Morocco in the years to come. “Morocco
through Algerian territory on its way to Spain could construct LNG terminals or bring in float-
– from 8 bcm per year to 10.5 bcm per year and ing storage [and] regasification units (FSRU) to
also deliver LNG cargoes by tanker if necessary. import gas normally supplied through GME,” he
These promises won’t help Rabat, however. told NewsBase.
Algeria appears to have no interest in discussing Kinnear indicated that he believed Rabat was
the matter with Morocco, so GME is not likely to keen on the FSRU option, referring to Moroc-
resume operations any time soon. As such, the co’s Minister of Energy Transition and Sustain-
Moroccan gas market is set to remain tight for able Development Leila Benali’s statements on
the time being. November 8 about plans to prepare local ports
for incoming LNG shipments. “Tangier may be
Domestic gas production a possible location for an FSRU,” he remarked.
In the longer term, there are other supply Like Sherriff, he said he saw FSRUs as a
options. longer-term option that was not quite viable yet.
On the one hand, Morocco is trying to Morocco’s gas needs are likely to remain rela-
develop its domestic gas resources. The coun- tively modest for the time being, and the coun-
try’s proven gas reserves amounted to 50bn try can switch to other types of fuel in the short
cubic feet (1.42bn cubic metres) as of 2017, but term, he stated.
the number is anticipated to rise as the explo- “Morocco is able to import more oil and coal
ration campaigns being carried out by interna- and utilise existing spare capacity at other power
tional oil companies (IOCs) move forward. plants ... [There] are increased costs for Morocco
Martin Sherriff, the head of Welligence with the end of Algerian supply, but it’s a major
Energy Analytics’ Middle East and North inconvenience, not an existential issue for its
Africa (MENA) group, drew attention to several energy supply,” he said. ™

(Image: Engie)

Week 46 17•November•2021 www. NEWSBASE .com P5