Spain Grapples with Gas Supply Challenges Amid Algeria-Morocco Tensions

The crisis between Russia and Ukraine will not impact Spain as much as the one between Morocco and Algeria, in terms of gas supply. Since the closure of the Maghreb-Europe gas pipeline (GME) crossing Morocco, Spain is forced to source liquefied natural gas on international markets, which is more expensive for it, says Atalayar, specifying that this week, the price of a barrel of crude oil has already reached $90, or $30 more than the forecasts of the Spanish Executive for 2022.

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Similarly, the cost of electricity remains high due to rising gas and gasoline prices. Currently, Spain imports a little over 9% of its gas from Russia, and could fall back on other producing countries in the event of a possible supply cut. "It is clear that we are affected by the evolution of gas prices at a time when the demand from Asian markets is not very important. There are also the tensions with Russia, which remains the main supplier of natural gas to most European countries," acknowledged Teresa Ribera, the third deputy prime minister and Minister of Ecological Transition.

Read: Spain’s LNG Imports Surge to 69% Amid Algerian Pipeline Closure

The closure of the GME continues to affect Spain, which is struggling to make up for the 6 billion cubic meters of gas that Algeria was supplying it through this pipeline. It is now content with the Medgaz, the pipeline of smaller capacity than the GME, which connects it directly to Algeria, and imports more liquefied natural gas (LNG). Minister Ribera reassures that Spain is protected from any possible gas supply disruption, while some experts warn of Spain’s vulnerability.

Read: Medgaz Pipeline Expansion to Boost Algeria-Spain Gas Supply

The Algerian and Spanish governments have concluded an agreement to increase the transport capacity of Medgaz from 8 to 10 billion cubic meters per year. At the end of November, Algeria was providing more than 40% (44.5%) of the gas needed by Spain, far ahead of the United States (13.3%), Nigeria (10.9%), Russia (8.7%), Qatar (6.7%), France (4.6%), Trinidad and Tobago (3.3%) and Norway (2.9%). Moreover, Enagás has put in place a security plan to facilitate the import of LNG in the six regasification plants located among others in Barcelona, Gijón, Cartagena and Huelva.