The Closure of Maghreb-Europe Gas Pipeline by Algeria Bolsters Spain-Morocco Ties
The diplomatic fallout between Algeria and Morocco has bolstered energy collaborations between Rabat and Madrid following the shutdown of Algeria's largest gas pipeline with Spain, the Maghreb-Europe pipeline, in November of last year.
This pipeline connected Algerian gas fields with the port of Tarifa in Cadiz via Morocco, earning the Moroccan government over 50 million euros annually in transit fees and 800 million cubic meters of Algerian gas at a stable price which was used to power their stations. However, Algiers has decided to cut off the supply.
According to a report published by Atalayar on February 26, 2023, Algeria's move is seen as an attempt to cripple Morocco's economy as Algiers viewed Rabat as its main rival in the Maghreb, with whom they are competing for regional dominance.
The dispute over Western Sahara has been a source of tension for some time, but it escalated in August last year when the head of the Algerian diplomacy announced the breakdown of bilateral relations. Since then, Algeria has been using energy as a tool to pressure their neighbour towards meeting their demands.
However, Morocco has responded by turning to other sources of energy. The volume of hydrocarbon sales to Morocco has increased by an exponential 821%, with exports to Morocco reaching 553 GW/hour, compared to just 60 GW/hour the previous year. Spain transferred 1,882 GW/hour to Morocco during the six months of the pipeline's operations, Enagás records showed.
The Spanish government is now expecting Morocco to pay 2 million euros annually for this operation to maintain access to regasification. The tariff in force is the same tariff imposed on France and Portugal for providing the same services in 2022.
It is important to note that Spain is not selling the gas that arrives from Algeria; Morocco is importing it from international markets.
Algeria protested to Spain, but Spanish energy company Enagás has assured Algerian energy company Sonatrach that the liquefied natural gas that Morocco is receiving does not come from Algerian fields.
Enagás claims to have a complex system for measuring each molecule of gas transported, but the system manager could not identify which commercial company is responsible for carrying out the operation with Morocco.
Meanwhile, the Spanish government has prioritised relations with Morocco over those with Algeria, which has led to Spain's support for Rabat's proposal for autonomy under Moroccan sovereignty for Western Sahara.
In response, Algeria severed diplomatic ties and froze trade with Spain. While the bilateral crisis has not affected gas exports, it has affected the price, and only time will tell if the two countries in a diplomatic wrangles will find a solution to their problems.