Algeria Tells Spain Not to Re-Export Gas Amid Morocco Spat
Algeria Threatens to Cut Gas Flows to Spain in Spat Over Morocco
(Bloomberg) -- Algeria threatened to cut natural gas flows to Spain if it re-exports Algerian supplies to other countries, amid rising diplomatic tensions over Morocco.
The warning came after Spanish Energy Minister Teresa Ribera said Madrid would start sending gas, albeit of non-Algerian origin, to Morocco via the Maghreb-European pipeline.
Spain has discussed the use of the pipeline, known as MEG, with Algeria in recent months and its decision was communicated on Wednesday, according to a statement from the Spanish government.
Algeria is unlikely to retaliate against Spain if it pipes gas from other countries to Morocco. Leila Benali, Morocco’s energy minister, said in an interview in February that Morocco wants to buy liquefied natural gas on global markets and send it to re-gasification terminals located outside of the country. The gas would then be piped to Morocco, she said.
“The LNG will not come from North Africa nor Europe,” a spokesperson from the Moroccan energy ministry said by email on Thursday.
The quarrel is yet another threat to Europe’s energy security. Russia halted gas flows to Poland and Bulgaria on Wednesday following European Union sanctions on Moscow for its invasion of Ukraine. Algeria provides about 8% of Europe’s gas imports, making it the biggest supplier after Russia and Norway.
“We see the Algerian warning as a reminder that no Algerian gas should go to Morocco,” JPMorgan Chase & Co. analysts including Javier Garrido wrote in a note. “We expect Morocco to announce a specific LNG contract in Spain with specific volumes and this should hopefully address the concerns.”
Gas normally flows through the MEG line from Algeria to Spain via Morocco. But Algeria stopped sending fuel through it late last year when it cut diplomatic ties with Morocco because of a spat over Western Sahara. Algiers recalled its ambassador to Spain last month after Madrid ended a longstanding policy of neutrality toward the territory and backed Morocco’s plans for limited autonomy.
The Morocco-Spain section of MEG is owned by companies from Morocco, Spain and Portugal. They can reverse the flows without Algeria’s consent, according to Morocco.
Spain is still receiving Algerian gas through the Medgaz line, which doesn’t cross Morocco, and as LNG. Algeria also has a gas pipeline that connects to Italy.
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