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Algeria threatens to cut gas contract with Spain

Gas giant Algeria threatened Wednesday to break a contract to supply gas to Spain if Madrid transferred it onwards to "a third destination", amid tensions with regional rival Morocco.

Algeria threatens to cut gas contract with Spain
Spain, which is dependent on Algeria for gas supplies, broke in March with its decades-long stance of neutrality and recognised Morocco's autonomy plan for Western Sahara. (Photo by FETHI BELAID / AFP)

Algeria’s state-owned energy giant Sonatrach supplied more than 40 percent of Madrid’s natural gas imports in 2021, most of which was supplied directly through the 750-kilometre (465-mile) Medgaz deepwater pipeline.

Algeria, Africa’s largest gas exporter, previously also supplied gas through a second GME (Gaz Maghreb Europe) pipeline, which links Spain to Algeria via Morocco.

But Algiers in November shut supply through the GME due to a diplomatic rupture with Rabat, depriving Morocco of Algerian gas.

On Wednesday, Algeria’s Energy and Mines Minister Mohamed Arkab said his Spanish counterpart informed him that Madrid was to “authorise the operation, in reverse flow” of the GME pipeline, and that this would start “today or tomorrow”, an energy ministry statement said.

It did not mention the country the gas would be sent to.

However, in February, Spain said it would help Rabat to “guarantee its energy security” by allowing it to transport gas through the GME.

Algiers warned that any routing of “Algerian natural gas delivered to Spain, whose destination is none other than that provided for in the contracts, will be considered as a breach of contractual commitments.”

Doing so “could result in the termination of the contract between Sonatrach and its Spanish customers”.

Algeria and Morocco have seen months of tensions, partly over Morocco’s normalisation of ties with Israel in exchange for Washington recognising Rabat’s sovereignty over the disputed region of the Western Sahara.

Spain, which is dependent on Algeria for gas supplies, broke in March with its decades-long stance of neutrality and recognised Morocco’s autonomy plan for the territory, a former Spanish colony.

READ ALSO: Why Spain’s Western Sahara U-turn is a risky move with no guarantees

Algeria’s warning comes as Europe seeks to wean itself off Russian energy following its invasion of Ukraine.

Russia’s state energy giant Gazprom on Wednesday stopped all gas supplies to Poland and highly dependent Bulgaria, raising the spectre of a shortage in the region — and Europe as a whole.

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POLITICS

Qatar emir visits Spain as EU eyes gas alternatives

Qatar's emir began a state visit to Spain on Tuesday as Europe seeks to diversify its natural gas supply sources to reduce its energy dependence on Russia.

Qatar emir visits Spain as EU eyes gas alternatives

Sheikh Tamim bin Hamad Al-Thani was welcomed by King Felipe VI at Madrid’s royal palace at the start of his two-day visit, his first to Spain since he ascended the throne in 2013.

The emir, who is accompanied by Qatar’s foreign and energy ministers, is scheduled to hold talks with Prime Minister Pedro Sánchez on Wednesday.

Spain and Qatar are expected to sign a dozen economic and commercial contracts during his visit, mainly regarding energy, according to a Spanish government source.

The visit comes as the European Union is aiming to cut its reliance on Russian gas by two-thirds this year due to Russia’s invasion of  Ukraine.

Russia currently supplies around 40 percent of Europe’s gas needs.

Qatar, which has the third-largest natural gas reserves in the world, is currently Spain’s fifth-biggest supplier of natural gas after the United States, Algeria, Nigeria and Egypt.

The country accounted for 4.4 percent of Spain’s total gas imports in April and the Spanish government hopes this share could increase.

“We are working closely with out European counterparts” on the long-term supply of liquefied natural gas (LNG), Qatar’s ambassador to Spain, Abdullah Al-Hamar, told Spanish daily 20 Minutos.

The emir of Qatar’s trip to Europe will also include visits to Germany, Britain, Slovenia and Switzerland, where he will attend the World Economic Forum which will run in the mountain resort of Davos from May 22nd-26th.

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