Algeria terminates contract to supply gas to Europe via Morocco

The decision by Algeria has worsened the already fraught diplomatic relations between the two countries. It also raises concerns about gas shortage and energy price rise in Europe, with predictions of high demand during the cold winter months

November 01, 2021 by Peoples Dispatch
Algeria gas supply
(Photo: Middle East Online)

Algeria will stop supplying natural gas to countries in Europe via a pipeline that passes Morocco. The decision was announced by Algerian president Abdelmadjid Tebboune on Sunday, October 31. Tebboune ordered state-owned energy company Sonatrach to stop using the Gaz-Maghreb-Europe (GME) pipeline to supply gas to primarily Spain and Portugal following the expiration of the GME contract between Sonatrach and the Moroccan National Office for Electricity and Potable Water (ONEE) at midnight on Sunday. The Algerian government has decided not to renew the contract as relations between the two neighboring countries continue to deteriorate. Algeria terminated diplomatic relations with Morocco and closed its airspace to Moroccan planes earlier this year.

A statement by the Algerian president released yesterday stated that the decision was taken after consultations with the prime minister and the ministers of energy and foreign affairs, citing “hostile behavior of the (Moroccan) kingdom which undermines national unity.” Following the termination of the contract, Algeria will use the Medgaz undersea pipeline with an annual capacity of 8 billion cubic-meter (bcm), instead of the 13.5 billion bcm GME pipeline in use since 1996. The Medgaz pipeline has significantly smaller capacity, raising concerns and speculation about future gas shortages and energy price rise across Europe.

Spain’s ecological transition minister Teresa Ribera said last week that there were “arrangements taken to continue to assure, in the best way, deliveries of gas through Medgaz according to a well-determined schedule.” Algeria has also proposed supplying gas to Europe by sea, though analysts have questioned the financial viability of the shipping option. 

Morocco in a statement on Sunday said that termination of the contract will have “little impact” on the national electricity system, adding that arrangements have already been made to ensure stable, uninterrupted electricity supply. Morocco also said that other options are being explored for sustainable alternatives in the medium and long term.

Relations between Algeria and Morocco, which have always been delicate over the issue of Moroccan occupation of Western Sahara, have been on the downturn in recent years. Algeria has alleged that Morocco is trying to harm Algeria’s national unity and has taken several steps to destabilize the security situation in the country. Algeria vehemently opposed the US recognizing Morocco’s sovereignty over Western Sahara. It also strongly condemned Morocco recognizing the state of Israel and opening diplomatic relations with it.

Algeria supports the Polisario Front in the Western Sahara conflict and the demands for independence and self-determination for the people of the region, while Morocco considers Western Sahara to be part of its country. The Algerian government has accused Morocco of secretly working with Israel to undermine Algeria’s security and blamed it for the devastating forest fires that wreaked havoc in the northern part of the country in August this year. Morocco has consistently denied all these allegations, calling them “unilateral and unfounded”.

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