Negotiations to Resume for Maghreb-Europe Gas Pipeline Contract Renewal

While the operating contract for the Maghreb-Europe gas pipeline is due to expire next November after 25 years of activity, some Algerian and Spanish media have announced the suspension of the negotiations leading to its renewal. This decision would follow the commissioning a few weeks ago of the extension of the EGPDF gas pipeline from El Aricha to Beni Saf over a distance of 197 km. This extension has made it possible to strengthen Algeria’s gas export capacities via the Medgaz gas pipeline which directly connects the Béni Saf facilities in Algeria to Almeria in Spain. "The negotiations will resume next July. [...] Gas is strategic for the three countries and we do not treat this type of file lightly," confides an authorized source in Rabat to Le360.

Morocco benefits from the operation of the Maghreb-Europe gas pipeline. In total, 7% of royalties received on the gas transiting through its territory, or between 650 and 800 million nm ³ of gas per year. In value, the royalties are not fixed because they vary according to the evolution of the gas price, a hydrocarbon that is correlated to that of oil. The kingdom received the largest royalty in 2014, during the surge in oil prices. The amount reached 2.4 billion dirhams. In 2020, the royalty fell to less than 500 million dirhams due to the drop in the price of black gold, the drop in gas demand due to the Covid-19 pandemic, and the drop in Algerian gas exports to the Spanish market due to increased American competition.