Algeria Breaks Ties with Morocco, Utilizes Direct Natural Gas Pipeline to Spain

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Algeria will no longer utilize the Maghreb-Europe Gas Pipeline (MEG) – which runs overground through Morocco – to transport natural gas to Spain, but rather will divert all supply to the Medgaz pipeline which provides a direct link between the Hassi R’mel field in Algeria and the international market.

The decision comes after Algeria announced the breakdown of diplomatic ties with neighboring Morocco, after months of worsening relations attributed to disagreements over the sovereignty of Western Sahara. Having recently cut all ties with its neighbor, Algeria is focusing on alternative solutions to maintaining a consistent export supply to Spain – the Medgaz pipeline.

In addition to diplomatic challenges, the decision to discontinue exports using the MEG pipeline is influenced by whether or not Morocco will renew the MEG transit deal. With the agreement expiring in October 2021, and deteriorated relations between Morocco and both Spain and Algeria, Algeria has opted for alternative export solutions.

With the country exporting approximately 9.06 billion cubic meters (bcm) of natural gas to Spain in 2020 – 3.67 bcm via the MEG pipeline and 5.39 bcm via the Medgaz pipeline – Algeria has announced the expansion of the Medgaz pipeline to ensure export capacity is maintained despite the diversion. At a cost of $90 million, the expansion will increase pipeline capacity by 2 bcm/year (25%) reaching a total capacity of 10 bcm/year. The expansion enables Algeria to maintain export quantities to Spain whether or not the MEG transit deal is renewed.

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Charné Hollands

Charné Hollands

Charné Hollands is the Deputy Editor at Energy Capital & Power. She holds a Higher Certificate in Professional Photography and Masters in Media Studies from the University of Cape Town. Charné writes content for ECP's website and events as well as co-authored African Energy Chamber: Road to Recovery.

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