Morocco, Spain reportedly finalize repurposing of Maghreb-Europe pipeline deal

Morocco and Spain have reportedly reached an agreement on restarting the Maghreb-Europe gas pipeline, following the shutdown that resulted from Algeria’s refusal to renew the trilateral gas shipping agreement linking the three Mediterranean countries.

Reports of a new exploitation model for the pipeline were confirmed by the Moroccan Minister of energy to US news outlet Bloomberg back in early February, which will now serve as the tool for Morocco to treat its internationally purchased liquified natural gas (LNG) and gasify it in Spain before sending it back to Morocco via the pipeline.

According to sources of the Spanish newspaper “La Razon,” Spain agreed to Morocco’s request regarding the exploitation of the pipeline, indicating that “Madrid responded to Rabat’s request in light of the distinguished trade relations between the two countries despite the diplomatic crisis.”

“Morocco will be able to acquire liquefied gas from international markets, unload it at a gas re-conversion plant on the Spanish peninsula, and use the pipeline to deliver it to two Moroccan electricity stations,” says the report.

Although “technicalities have yet to be finalized between both parties,” the Spanish gas shipments to Morocco will make it possible to restart the combined cycle power stations of Tahaddart, near Tangier and Ain Beni Mathar in Oujda.

Both cover around 10% of Moroccan gas-sourced electricity production and are managed by Spanish companies Endesa and Abengoa.

Following initial reports of a possible repurposing of the pipeline, Algeria became concerned over the possibility of Spain selling its Algerian gas to Morocco. But this “will not happen,” as both Moroccan and Spanish officials have said.

Algeria “prohibited” Spain from reselling its gas to third parties, as specified in their contract, as under the destination clause, the European country is obliged to exclusively consume the Algerian gas within Spanish territory.

“La Razon” sources have also confirmed this, quoted in the report, the source said that “ it would be gas bought by Morocco on international markets and unloaded through European, Spanish, Portuguese or other infrastructures, and sent to Morocco through the GME, by operators governed by rules of free access for third parties and non-discrimination.”