Algeria Halts Medgaz Pipeline Expansion Amid Spain-Morocco Sahara Dispute

Spain’s decision to support Morocco’s autonomy plan for the Sahara has irritated Algeria, which has already recalled its ambassador to Madrid, Saïd Moussi, for consultations, and will block the ongoing expansion work on Medgaz, reports Informacion.

The company Naturgy, holding 49% of Medgaz, is the most affected by this new crisis with Algeria. With its partner, Sonatrach, the Algerian national company that holds the remaining 51% of the infrastructure, they have invested some 75 million euros in 2021 to increase the capacity of Medgaz from 8 billion m3 to 10 billion m3 of gas per year. The expansion work on the infrastructure has already been carried out in January and the project is currently in its final phase which includes the final technical tests before its commissioning.

To read: Algeria Vows ’Energetic’ Response to Spain’s Shift on Western Sahara

But Spain’s change of position on the Sahara risks blocking the commissioning of Medgaz, which will increase the gas supply capacity by 25%, or 2 billion cubic meters of gas per year. For now, "gas supply is guaranteed," say Spanish sources. Likewise, Algeria considers the commercial agreement with Spain necessary for the time being, but has already announced that it will now consider Italy as the European gateway for its gas production.

Algeria should also raise the gas selling prices to Spain, warn sources in the gas sector, who recall that Spain imported more than 42% of Algerian gas in 2021, after the closure, at the end of October, of the Maghreb-Europe gas pipeline crossing Morocco.