HomeEconomyThe LNG market wide open in the Kingdom from Ramadan

The LNG market wide open in the Kingdom from Ramadan

Last February, the Spanish government claimed that “Morocco could acquire liquefied natural gas (LNG) on international markets, have it delivered to a regasification plant in peninsular Spain and use the Maghreb gas pipeline (GME) to transport it to its territory“.

Today that the improvement in relations between our two Kingdoms has taken on other dimensions, Spain announces more than ever that ” Madrid was going to help Morocco guarantee its energy security” by allowing it to transport gas in the opposite direction through the Maghreb Europe Gas Pipeline (GME) which Algiers has not supplied since last November 1, considering Morocco too hostile to its hegemonic ambitions.

“Morocco requested support to guarantee its energy security on the basis of (our) commercial relations, and Spain responded favorably as it would have done for any partner or neighbor”said the Spanish Ministry of Ecological Transition in a press release.“Morocco will be able to acquire liquefied natural gas (LNG) on international markets, have it delivered to a regasification plant in peninsular Spain and use the Maghreb gas pipeline (GME) to transport it to its territory”, added the ministry. It is therefore done, Morocco will enter the liquefied natural gas market from the holy month of Ramadan.

She is the Moroccan Minister for Ecological Transition, Leila Benali, who announced the entry of the Kingdom into this market for the first time in its history. All good for Morocco, because in addition to guaranteeing Morocco’s access to the liquefied natural gas (LNG) market, it also involves reducing greenhouse gas emissions. Moreover, Morocco is seriously preparing for this change. Indeed, the Kingdom is already preparing four ports to receive liquefied gas and transport and storage facilities are also under construction.

We could, so to speak, thank the Algerian president with the unpronounceable name for having ordered Sonatrach to close the taps and not to renew the contract for the GME gas pipeline passing through Morocco and supplying Spain, Portugal and even Europe in gas. That being said, Laila Benali clarified that the infrastructures already existing in the country and in Europe will be used to do this. In recent months, the Kingdom has held several discussions with Spain in order to be able to use both its liquefied gas terminals and its regasification units to guarantee its energy security. Madrid accepted Rabat’s request, which will allow it to buy crude oil on international markets, offload it at a regasification plant on the Spanish mainland and import it through the hitherto inactive GME. The LNG would thus arrive in solid form in Spain to then be processed and injected into the gas pipeline to Morocco. This certainly entails an additional cost, since the import of liquefied gas is much more expensive than its import by gas pipeline. But never mind !

Enagas, Spain’s main gas carrier, in which the government holds a 5% stake, is expected to sign an interconnection agreement with Morocco. Its terminals have a geostrategic position and favor the maritime transport of this resource. A senior official of the National Office of Hydrocarbons and Mines (ONHYM) affirmed that “the inversion of the flow of GME is a solution among other supply alternatives”. It would thus be possible to supply power plants in the west of the region that run on liquefied natural gas.

In addition, Morocco is focusing on the construction of the first regasification plant in the port of Mohammedia, a gas terminal and a floating storage unit in this port city. Crude oil demand will reach 3 billion cubic meters just as the territory seeks to decarbonize its economy by 2050. This decarbonization requires improving the electrical systems used in sectors such as industry and transportation. A series of projects in this direction are underway to add 10 GW of wind, solar and hydroelectric capacity in the coming years. They are part of the roadmap package submitted to the UN, with which Morocco has committed to using greener energy to create a more competitive economy.

This is, moreover, one of the objectives of the Moroccan energy plan. The latter aims to accelerate the development of renewable energies in order to obtain carbon-free electricity. The green plan aims to generalize energy efficiency and increase the use of natural resources in all sectors of activity, while boosting the circular economy and reducing and recycling the waste produced. The aim is to reduce dependence on conventional thermal power plants. On the other hand, Morocco also plans to strengthen its cooperation with the United Arab Emirates (UAE) in the field of energy transition. Sheikh Sultan bin Ahmed al-Jaber, Emirati Minister of Industry, says Abu Dhabi is the main investor in the Kingdom and that “investment areas cover energy transition, tourism and industry“.




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