Morocco Threatens Gas Pipeline Renewal Amid Diplomatic Row with Spain and Algeria

Negotiations for the renewal of the Maghreb-Europe gas pipeline concession are stalling. This is yet another attempt at retaliation by King Mohammed VI, angered by Spain and Algeria’s support for Brahim Ghali, the leader of the Polisario Front, reports El Mundo. Algerian President Abdelmadjid Tebboune, during his visit to Ghali upon his return from Spain, expressed his "gratitude to the Spanish authorities for the efforts made, the welcome given to the Sahrawi president and the care he received," the newspaper recalls.

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From a geostrategic point of view, the Maghreb-Europe gas pipeline, which allows Spain and Portugal to be supplied with gas from Algeria via Morocco, is certainly important, but is no longer so crucial due to the existence of the Medgaz, a new pipeline directly connecting Algeria and Spain. "Even if Morocco decided not to renew the concession and stop transiting gas through this infrastructure, Spain’s supply is assured," say experts who specify that currently, Medgaz, owned by the Algerian national gas company Sonatrach (51%) and Naturgy (49%), is already transferring more gas than the Maghreb-Europe which only covers 15% of Spain’s consumption. But in addition to Medgaz, Spain relies on its interconnections with France in Irun and Larrau where seven large regasification plants are installed.

However, it would be premature to end the Maghreb-Europe gas pipeline concession, experts say, recalling the interests at stake. For Naturgy, the continuation of the operation of this gas pipeline allows it to diversify its gas business. Spain, for its part, would benefit from having several sources of supply. Morocco, for its part, has a project to build and operate a new gas pipeline connecting Casablanca and Tangier, in order to compete with Algeria, the main supplier to Europe, in the long term. But for now, the Maghreb-Europe gas pipeline concession provides Morocco with two major advantages: it benefits from a portion of the gas transiting through the infrastructure and collects a toll of 7% which represents around 200 million euros per year.

But Spain is aware that its economic relations with Morocco go beyond gas. This is why it wishes to appease the tension and calls for a resumption of cooperation with the kingdom.