VS’A British company intends to supply the Shereefian kingdom with part of the gas it needs from a field it exploits in eastern Morocco. This materialized following a supply agreement signed on Tuesday by Sound Energy with the Moroccan public establishment ONEE (National Office for Electricity and Drinking Water). “The Tendrara concession in eastern Morocco is concerned,” said a press release from the firm specializing in oil and gas exploration. The announcement of this agreement comes a month after Algiers’ decision to terminate the Maghreb Europe Gas Pipeline (GME) contract serving Spain via Morocco.
What’s in the agreement between Sound Energy and Morocco
Under the new contract, Sound Energy, headquartered in the United Kingdom, commits to produce and deliver to ONEE up to 350 million cubic meters of liquefied natural gas per year, over a period of 10 years. The gas will pass through the Moroccan part of the Maghreb Europe Gas Pipeline, which should allow the restart of this gas pipeline crossing Morocco and which delivered Algerian gas to the Iberian Peninsula before Algiers terminates its contract at the end of October, against a background regional rivalries between the two neighbors of the Maghreb.
What was affected in the status quo
Since 1996, Algeria has shipped around 10 billion cubic meters of natural gas per year to Spain and Portugal via GME. In return for the transit of the gas pipeline, Rabat received annually nearly one billion cubic meters of natural gas, or 97% of its needs. In 2020, the royalty for the transit of Algerian gas had brought Morocco about 50 million dollars (43.2 million euros), according to a Moroccan expert. Algerian gas deliveries to Spain will now be made exclusively via the Medgaz submarine gas pipeline launched in 2011. Following the non-renewal of the GME contract by Algiers, ONEE assured that the Algerian decision “would not have in the immediate future only an insignificant impact on the performance of the national electricity system ”.
The cause: tensions around the Sahara
Tensions have recently increased, culminating with Algiers breaking off diplomatic relations with Rabat on August 24. Their neighborhood is historically difficult due, in particular, to the thorny issue of Western Sahara. This former Spanish colony, considered as a “non-autonomous territory” by the UN in the absence of a final settlement, has for decades been pitting Morocco against the Saharawi separatists of the Polisario Front supported by Algeria.