Spain prohibited from reselling Algerian gas to Morocco

Spain is prohibited from reselling Algerian gas to third parties, as specified in its contract with Algeria, meaning that Spain is unable to resell gas to Morocco, according to Spanish and Algerian news outlets.

“Under the destination clause included in the gas contracts between Algeria and Spain, the latter is not authorized to resell Algerian gas to customers outside Spanish territory,” explained oil expert Mourad Preure, to Algerian media.

“All the volumes of gas sent from Algeria must be consumed in Spain,” Preure further clarified, indicating that there is clearly no way for Spain to resell Algerian gas to Morocco.

The Spanish government, which considers Algeria a “strategic partner,” and believes it is unable “to take the risk” of not meeting its commitments to Algeria, reports local media.

On February 2, Spain announced that it would assist Morocco in importing natural gas through the Maghreb-Europe gas pipeline (GME).

According to this agreement, Morocco can buy liquefied natural gas (LNG) on international markets, transform it into a regasification plant in Spain before transporting it to its territory via the GME, reports Spanish news outlet El Espanol-Invertia.

“Morocco has asked for support to guarantee its energy security on the basis of trade relations and Spain has responded positively as it would do with any other friend or neighbor,” according to a statement from the Spanish Ecological Transition ministry.

Algeria, according to sources familiar with the situation, did not like Spain’s decision to permit the kingdom to import gas through the pipeline because of the tensions between the two North African countries, reports Spanish newspaper Okdiario.

While this news would have been highly offensive to Algerian authorities, the Spanish officials assured that it was simply a simple commercial agreement with a partner, “just as it would have been with any other partner or neighbor.”

As of recently, the United States is Spain’s top gas supplier, surpassing Algeria, which is unable to cope with Spain’s needs. Data from Enagás shows Spain imported 35% of its LNG from the United States and 25% from Algeria in January.

Following Algeria’s decision to terminate the Maghreb-Europe gas pipeline contract in November due to diplomatic tensions with Morocco, almost 70% of Spain’s gas needs have been imported.