Spain's gas supplies under threat as Algeria closes Maghreb pipeline

Europe is facing an energy crisis amid shortages and rising gas prices

Spain’s energy crisis could worsen after Algeria stopped supplying natural gas to the European country through a key pipeline on Monday.

President Abdelmadjid Tebboune ordered Algeria’s state energy firm Sonatrach to halt gas exports to Spain on Sunday due to political tensions with neighbouring Morocco.

Algeria is Spain’s largest gas supplier, meeting more than half of its demand via the Maghreb-Europe pipeline which has linked the two countries since 1996.

However, having cut-off diplomatic ties with Rabat in August, Algeria said it will not renew the contract for the Maghreb-Europe pipeline, which runs through its neighbour, after it expires on Monday.

In a statement on Sunday, President Tebboune ordered the end of trade ties between Sonatrach and the Moroccan National Office for Electricity and Potable Water “in light of the hostile behaviour of the [Moroccan] kingdom which undermines national unity.”

Algeria, Africa’s biggest natural gas exporter, will continue to supply the Iberian Peninsula through the Medgaz undersea pipeline, which does not go through Morocco, but there are concerns the alternative export route does not have enough capacity to alleviate gas shortages and soaring energy prices across Europe.

The undersea line can carry 8 billion cubic metres (bcm) a year, 5.5 bcm less than the 13.5 bcm capacity of the Maghreb line. In September, Sonatrach said it planned to increase its capacity to 10.5 bcm by the end of this month.

Last week, Teresa Ribera, Spain's ecological transition minister, travelled to Algeria to discuss the consequences of shutting down the route at a time when consumers are already reeling from soaring prices of gas, oil and coal before winter.

“Arrangements [were] taken to continue to assure, in the best way, deliveries of gas through Medgaz according to a well determined schedule,” said Ms Ribera following the meeting.

Despite the reassurances and promises of increased capacity, there are still concerns over how Spain will make up the shortfall.

Algeria has said it will use ships to transport liquefied natural gas to Spain if necessary, but analysts say continuously rising shipping rates — a result, in part, of the structural energy shortages in Europe and an impending cold winter — are unlikely to make that a financially viable option.

Relations between Algiers and Rabat have been fraught in past decades — especially over unrest in southern Morocco.

Rabat considers the former Spanish colony in the Sahara region an integral part of its kingdom — a view supported by the majority of Arab states — but Algeria backs an armed independence movement that has waged an insurgency against the government for decades.

In August, Algeria accused Morocco of complicity in deadly forest fires that ravaged the country's north.

Authorities also accused the Movement for Self-determination of Kabylie (MAK) of involvement in the lynching of a man falsely accused of arson, an incident that sparked outrage.

Algeria directly accused Morocco of supporting the MAK, which it classifies as a terrorist organisation.

Updated: November 1st 2021, 11:26 AM