Algeria ensures that all natural gas supply to Spain is “entirely guaranteed”

Currently, it is the main supplier of natural gas for Spain.

Image of the Medgaz gas pipeline.

The Medgaz gas pipeline that carries natural gas directly from Algeria to Almería will increase its capacity to supply by the end of the year 10,700 million cubic meters per year, with which the supply would be “guaranteed” despite the fact that the Maghreb Europe Gas Pipeline (GME) that passes through Morocco has ceased to be used after the end of the transit contracts on October 31, according to the agency published this Sunday. official Algerian news agency, APS.

The note published by the government media highlights that the entry into service of the fourth turbocharger at the end of this year raises the flow to 10,700 million cubic meters per year and ensures that it could increase to 16,000 million cubic meters “by making additional investments ”. Medgaz currently has a capacity of 8,000 million cubic meters per year, below the 11,000 million committed by Algeria, according to Europa Press.

It also points out that “the final investment decision in this structure can only be made in the event that long-term natural gas contracts are concluded between (the Algerian company) Sonatrach and European customers by volume (…) For a sufficient period to recover the investments ”.

In addition, remember that Sonatrach and Naturgy strengthened their position in Medgaz in 2020 with the acquisition of Cepsa shares, so that Sonatrach controls 51 percent of Medgaz, while 49 percent is in the hands of the Spanish Naturgy.

Liquefied natural gas

The expired contracts of the GME for the supply of natural gas to Morocco, Spain and Portugal totaled a total of 6.7 billion cubic meters of natural gas per year, about half of the maximum capacity of the GME.

An energy expert cited by APS, Mahmá Buzián, explained that in the face of the non-renewal of the GME contracts, Sonatrach has agreed to “transfer part of the volume planned for the GME to Medgaz.”

It should be remembered that Algeria is the main supplier of natural gas for Spain, a good part of which was transported until now via Morocco, through the GME, closed on October 31 due to the fact that the contract for its use will not be renewed due to the tensions between Morocco and Algeria. Therefore, due to this situation, the rest of the committed gas is expected to be transported as liquefied natural gas through LNG tankers, which would raise its price.