Shell Signs 12-Year Deal to Supply Morocco with LNG via Pipelines

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Shell Signs 12-Year Deal to Supply Morocco with LNG via Pipelines

Illuminated logo of Shell (© Shutterstock/Dom J)
Illuminated logo of Shell (© Shutterstock/Dom J)

A global oil major, Shell, signed a 12-year agreement to provide Morocco with an annual supply of 0.5 billion cubic metres (bcm) of liquefied natural gas (LNG), the country's energy ministry stated.

According to a Reuters report, the deal, signed by electricity and water utility ONEE and Shell, aims to bolster Morocco's gas supply and enhance its electricity mix. However, the ministry did not disclose the financial details of the transaction.

Initially, the ministry stated that the LNG would be transported from Spanish ports via a gas pipeline connecting the two countries as Morocco works to construct its own LNG terminals.

The newly-signed agreement will enable ONEE to power two key stations in northern and eastern Morocco, which had previously relied on Algerian gas delivered through the same pipeline.

In 2021, Algeria unilaterally decided to cease gas flows to Spain via Morocco using the pipeline, prompting  Rabat to announce plans to reverse the flow and import LNG from Spanish terminals. ONEE's objective is to increase the share of gas in Morocco's electricity production in line with the country's low-carbon goals, as outlined by the ministry.

According to official figures from last year, renewables accounted for 18% of Morocco's total electricity generation, while gas represented a mere 1.6% and coal dominated with 72%. As of March 2023, Morocco's installed capacity for renewable energy had reached 40%, with the country aiming to raise that figure to 52% by 2030.

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