As energy crisis looms, Spain protects Algerian gas supply | Business
MADRID (AP) – Spain launched a diplomatic offensive on Thursday to preserve its essential flow of Algerian natural gas as energy prices around the world soar and relations between Algeria and Morocco threaten disrupt the gas supply chain in North Africa.
As part of Algeria’s latest decision to strengthen its trade and diplomatic relations with the neighboring country, it plans to close a gas pipeline that supplies nearly half of Algeria’s natural gas imported by Spain via Morocco. A 25-year distribution agreement ends on October 31.
Algeria has indicated that it will continue to supply gas to Spain via a separate pipeline that crosses the Mediterranean Sea and connects directly to the Iberian Peninsula, as well as on ships carrying liquefied natural gas, or LNG.
But any disruption is likely to increase costs for Spain. The country’s dependence on Algerian gas has increased in recent years and now accounts for half of all its gas imports.
Spanish Foreign Minister JosÃ© Manuel Albares made a hasty trip to Algiers, where he was due to meet Algerian Foreign Minister Ramtane Lamamra on Thursday. The trip had not been scheduled in advance and was announced by the Albares Ministry earlier this week.
This visit comes as the Spanish government, and in particular Albares, are trying to reconnect with Morocco, Algeria’s regional rival.
Relations between Spain and Morocco hit a low in May over the two countries’ views on the future of Western Sahara, a former Spanish colony which was annexed by Morocco and which the United Nations says should be subject to decolonization.
The Spanish government is already working to cushion the impact on households of rising wholesale electricity prices due to growing global competition for natural gas and bottlenecks in supply chains of the main world producers.
Higher utility bills have pushed up inflation in Spain, as in much of Europe. Consumer prices rose 4% in September from a year earlier, Spain’s statistics institute said this week, an unprecedented increase in 13 years.
Experts predict the worst is yet to come as the northern hemisphere enters the colder, more energy-consuming winter months.
Spain is trying to replenish its gas storage facilities, which were at 72% capacity in mid-September, before the heat kicked on and increased electricity consumption.
Albares was joined by senior executives from Naturgy and EnagÃ¡s, two of Spain’s largest energy companies.
Naturgy and EnagÃ¡s are both stakeholders in the Europe-Mahgreb, or EMPL, pipeline, which annually delivers an average of 10 billion cubic meters of natural gas to southern Spain via Morocco and across the Strait of Gibraltar.
Naturgy and the Algerian Sonatrach have owned the Medgaz gas pipeline which has linked Algeria directly to the Iberian Peninsula since 2010. This pipeline pumps some 8 billion cubic meters but it was not clear whether it would be possible to expand its capacity , as desired by Algeria, to absorb the gas. delivery currently passing through Morocco.
Morocco captures 7% of the gas pumped by the gas pipeline, which began operating in November 1996. Its share has become an important contribution to the country’s energy mix and will dry up at the end of October.
Asked by Spanish lawmakers about his next trip to Algeria, Albares said on Wednesday that supplies were guaranteed.
“Spain’s gas supply is not in danger because our Moroccan and Algerian friends want to work together in this area,” the minister said.
Last month, Algeria severed diplomatic relations with Morocco, citing Rabat’s support for the “supposed right to self-determination” of the Kabyles, an indigenous people of northern Algeria, as well as alleged “acts of ‘espionage’ with spyware. The Algerian government announced on September 23 that it was closing its airspace to all Moroccan planes.
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