Shell International Trading Middle East Limited and the National Office of Electricity and Drinking Water (ONEE) have agreed to supply 0.5 billion cubic meters of Liquified Natural Gas (LNG) over a twelve-year period, said the Ministry of Energy Transition in a released statement.
The gas will be delivered from Spanish ports in the first few years of the project via a pipeline that will connect the two nations, until Morocco constructs its own LNG facilities, according to the Ministry.
The ONEE will use LNG to feed two power stations in northern and eastern Morocco which previously relied on Algerian gas from the same pipeline.
ONEE’s Managing Director, Abderrahim El Hafidi, stated, « After several purchases of LNG on the spot market in 2022, the office is thrilled to sign this agreement, which is ONEE’s first medium-term purchase contract on the international LNG market. »
Morocco will enter the worldwide LNG market for the first time in 2023, thanks to excellent cooperation and a climate of trust with our neighbors, said Leïla Benali, Minister of Energy Transition.
This came after Algeria unilaterally chose to discontinue pumping gas to Spain via the pipeline through Morocco in 2021. Rabat has stated that it will shift the flow direction in 2023 by purchasing LNG from Spanish ports.
According to the Ministry, the ONEE intends to boost the gas contribution in Morocco’s energy mix in order to meet carbon emission reduction targets.
According to official figures, renewable energy sources totaled 18% of total electricity generation in Morocco last year, while gas accounted for only 1.6%. Incidentally, coal accounted for 72%.
Renewable energy accounted for 40% of the country’s installed capacity by March 2023, with Morocco aiming for 52% by 2030.