Morocco offers to renew gas supply pipeline deal with Algeria

Morocco wishes to continue operating the Maghreb Europe Gas Pipeline, which connects Algeria to Spain via Morocco and whose contract will expire on 31 October, a senior official has said.

In return for allowing Algerian gas to travel through its territories, Morocco receives royalties worth 0.5 billion cubic metres of gas, which make up half the country’s consumption.

However, Algeria no longer needs the Maghreb Europe Gas Pipeline after it inaugurated a second gas pipeline that connects it directly to southern Spain.

The second pipeline has an annual export capacity of about 16 billion cubic metres, which is higher than the 12 billion cubic metres that passes through the Moroccan pipeline.

If Algeria refuses to renew the gas agreement or stops exporting to Morocco, Rabat will be forced to import gas from further afield and at a greater cost.

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