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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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SPAIN AND MOROCCO

Spain starts sending gas to Morocco after Algeria spat

Spain has started sending natural gas supplies to Morocco through the Maghreb-Europe gas pipeline (GME) to ensure its energy security following a supply crisis with Algeria.

Spain starts sending gas to Morocco after Algeria spat

“The first shipment via the Maghreb gas pipeline took place (on Tuesday) involving LNG (liquefied natural gas) which Morocco bought on the international markets and unloaded at a Spanish regasification plant,” a source at Spain’s ecological transition ministry told AFP.

In February, Spain said it would help Morocco address a gas supply shortage by letting it ship LNG to a Spanish regasification plant which could then be transferred to Morocco via the GME pipeline.

The GME pipeline, which crosses Morocco, had previously been used by Algeria to transport gas to Spain.

But in October, following a diplomatic spat, Algiers refused to renew a 25-year deal with Rabat to use the pipeline.   

Morocco had been receiving around a billion cubic metres of gas per year as transit fees, covering around 97 percent of its needs, so Algeria’s move directly impacted on Rabat’s energy supplies.

Algiers, which in the first quarter supplied about 25 percent of Spain’s gas imports, had in April warned Madrid not to re-export any of its supplies to Morocco, warning it could endanger its own contract with Algeria.

“A certification scheme guarantees that this gas is not of Algerian origin,” the Spanish ministry source said.

Spain’s Enagas, which operates four LNG terminals and the national gas grid, “will check the origin of the methane tanker carrying the gas” acquired by Morocco “and after unloading will issue a certificate”, ensuring that no other gas is exported, the source said.

Tensions peaked between the North African neighbours last year following Morocco’s renewal of diplomatic ties with Israel and Washington’s recognition of Rabat’s sovereignty over disputed Western Sahara.

Diplomatic ties have also nose-dived between Spain and Algeria after Madrid reversed its decades-long stance of neutrality on Western Sahara, agreeing to back Morocco’s autonomy plan for the disputed region to end a year-long diplomatic spat.

Spain’s move, widely seen as a victory for Morocco, infuriated Algeria, which backs the Polisario Front, Western Sahara’s independence movement.

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