Naturgy: “It is technically possible to sell gas to Morocco but it does not depend on us”

The energy company guarantees electricity to its customers at 65 euros/MWh for 3 years to disassociate itself from the daily electricity market.

Francisco Reynés, president of Naturgy

Naturgy has presented the company’s results up to September of that year to analysts and has reiterated its position regarding the diplomatic crisis between Algeria and Morocco. “Technically it is possible to sell gas to Morocco for the Maghreb gas pipeline, but it does not depend on us, it is a decision of Spain”.

The gas pipeline, which was inaugurated in 1996, was built with a reversibility system that allowed gas to enter from Morocco but also vice versa. However, it is an infrastructure that would manage Enagas, and that the Spanish Government would have to give the go-ahead.

On the other hand, the energy company has confirmed that it has already signed and secured 100% of the gas supply for the whole of 2022, not only through the Medgaz gas pipeline but also with other countries with LNG (liquefied natural gas).

Offer of electricity rates

Regarding the situation of the electricity market in Spain, the company has reiterated that it guarantees electricity to its customers €65/MWh for 3 years to get rid of the ‘pool’. This represents 5 euros more than what was announced in September, but it maintains that price for another year.

Naturgy will offer all of its available inframarginal electricity generation capacity to its customers (residential, commercial and industrial) at this price in order to reduce the impact of the upward wave of prices in the wholesale electricity market on domestic consumers.

With this new measure, Naturgy considered that it will allow its customers to decouple their bills from the volatility of the pool price, “demonstrating its commitment and long-term social sensitivity”.

“This is what we have done once again, as we did during the toughest stage of the pandemic, we have launched a measure to respond to an exceptional situation.”

“This initiative aims to reassure our customers, establishing an accessible and stable price, regardless of the volatility of the ‘pool’, and that we hope will be well received by the industry, an essential sector for the recovery and economic development of our country”.

This offer from Naturgy thus intensifies the commercial war between the large electricity companies in order to give ‘peace of mind’ in the short term to domestic customers in the face of the volatility currently existing in the regulated market -the so-called PVPC- due to the tension in the pool prices.

In the short term, the PVPC, due to its link to the wholesale electricity market, is more exposed to fluctuations in electricity prices, although in the medium and long term a drop in these prices is foreseeable due to the greater entry of renewables and the drop in natural gas.

Reduction of renewables

On the other hand, Naturgy has assessed “positively” the Government’s decision regarding the exclusion of reduction of fixed-price and term electricity contracts, since “it contributes to giving stability and visibility to generators and consumers, and especially to industrial clients potentially affected by the regulatory uncertainties of recent weeks”.

In this sense, the energy company values ​​that the government clarifications “maintain the incentives for term contracts as a strategy to mitigate the current volatility of the ‘pool'”.

In relation to the gas market in Spain, the company expects “a non-discriminatory tax treatment regarding electricity for all its customers” and thereby “being able to maintain territorial balance and avoid discrimination in autonomous communities in colder areas with higher energy consumption”.