Spain is facing the loss of a major source of natural gas
By Raphael Minder
Algeria has stopped supplying gas through one of its main pipelines that crosses Morocco, a move that could threaten Spain with reduced supplies or higher prices for natural gas as winter approaches and energy costs are soaring.
The shutdown, which began Monday, is the result of a longstanding territorial feud between Morocco and Algeria. It is meant to deprive Morocco of natural gas, which generates about 10% of the country’s electricity, as well as tens of millions of dollars of transit fees paid by users of the pipeline.
But it may also have a heavy impact on Spain, which imports about half of its gas from Algeria. Spaniards, like others throughout Europe, have been struggling with higher electrical bills because of a surge in the price of natural gas. The government in Madrid has had to take emergency measures to soften the blow on consumers.
The pipeline, with a capacity of about 13 billion cubic meters a year, is not the only way for Algerian gas to reach Spain. A smaller undersea pipeline that links Algeria and southern Spain can carry about 8 billion cubic meters a year, and Sonatrach, the Algerian national energy company, recently said that it hoped to increase its output to 10.5 billion cubic meters by the end of November.
Algeria is also proposing to make up for Spain’s lost gas by chartering tankers to transport liquefied natural gas across the Mediterranean, even as the cost of such shipments has surged recently.
This week’s move by the Algerian government comes after it broke off diplomatic relations with Morocco in August, in part to protest Morocco’s efforts to control the Western Sahara, a disputed territory. Since then Algeria has also closed off its airspace to Moroccan aircraft.
The dispute was rekindled last year when the Polisario Front, a Western Sahara separatist group backed by Algeria, broke off a longstanding cease-fire with Morocco.
On Sunday, the Algerian government said that Sonatrach would end its commercial activities with Morocco because that country’s “hostile” actions threatened “the national unity” of Algeria.
Morocco said the gas shut-off would have an “insignificant” impact on its electricity network. Morocco had been using Algerian gas to power two electricity plants that are partly operated by Spanish companies.
After an emergency meeting in Algiers last week, Spain’s environment and energy minister, Teresa Ribera, said that she was confident that Algeria could “guarantee that everything works in the most fluid and best manner possible” to keep gas supply flowing to Spain.
Some analysts are warning that it will be a challenge for Algeria to raise the capacity of the undersea pipeline or charter more liquefied natural gas ships, given that there is a shortage of available vessels.
Gonzalo Escribano, an energy expert at the Real Instituto Elcano, a Madrid-based think tank, said that Algeria’s pipeline closing could result in Spain paying more for the gas, given the high cost and complicated logistics of shipping liquefied natural gas, but it should not pose a major supply risk ahead of the winter. Despite the latest tensions, he said, “Algeria has historically always honored its contracts and political pledges in this field.”
For Morocco, however, Escribano said, “the situation is much more complicated,” both in terms of losing Algerian gas that had fueled its electricity grid and losing the fees that it had received from the gas transiting through the pipeline.