Algeria assures that Spain’s natural gas supply is “fully guaranteed”

The Medgaz gas pipeline, which carries natural gas directly from Algeria to Almería, will increase its capacity to 10,700 million cubic meters per year by the end of the year, bringing the supply despite the fact that the Maghreb Europe Gas Pipeline (GME), which will open after the end of the year Transit contracts will cross Morocco on October 31, as the official Algerian news agency APS published this Sunday.

The announcement, released by the government media, highlights that the commissioning of the fourth turbocharger by the end of this year will raise the flow to 10,700 million cubic meters per year and allow it to rise to 16,000 million cubic meters “through additional investment”. . Medgaz currently has a capacity of 8,000 million cubic meters per year, less than the 11,000 million cubic meters Algeria has pledged.

“The final investment decision in this structure can only be made if long-term natural gas contracts are concluded between (the Algerian company) Sonatrach and European customers by volume (…) for a period of time sufficient to amortize the investments.” , APS pointed out.

Algeria assures that Spain’s natural gas supply is “fully guaranteed”
Algeria assures that Spain’s natural gas supply is “fully guaranteed”

The text recalls that Sonatrach and Naturgy strengthened their position in Medgaz in 2020 by acquiring Cepsa shares, for which Sonatrach controls 51 percent of Medgaz while 49 percent is in the hands of Spanish Naturgy.

APS also recalls that GME’s expired contracts for the supply of natural gas to Morocco, Spain and Portugal amounted to 6.7 billion cubic meters of natural gas per year, roughly half of GME’s maximum capacity.

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

Algeria is the main supplier of natural gas to Spain, a good part of which has so far been transported via Morocco by GME, which was closed on October 31, as the contract for its use is not being renewed due to tensions between Morocco and Algeria.

In order to resolve this situation and ensure supply, it is expected that the remainder of the obligated gas will be transported as liquefied natural gas via LNG tankers, which would increase the price.

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