Algeria threatens to break the gas supply contract with Spain

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Algiers, which cannot digest Madrid’s reversal in favor of Morocco’s position in Western Sahara, threatened on Wednesday to break the contract to supply gas to Spain if the latter forwards it “to a third destination”. The Spanish government announced in February that it would help Rabat “guarantee its energy security”.

The Algerian energy ministry on Wednesday, April 27, threatened to cancel the contract to supply gas to Spain if the latter forwards it “to a third destination” amid diplomatic tensions with Madrid and Rabat in Western Sahara.

Algerian hydrocarbon giant Sonatrach provided more than 40% of Spain’s imported natural gas in 2021, most of which enters Spain via the 10 billion cubic meter per year undersea gas pipeline Medgaz.

Another part of the Algerian gas reached Spain by October via the Maghreb Europe Gas Pipeline (GME), which runs through Morocco. But Algiers shut it down after cutting off diplomatic ties with Rabat in August, thus depriving Morocco of the Algerian gas flowing through its territory.

According to a press release from the Algerian Ministry of Energy and Mines, Minister Mohamed Arkab “was informed today (Wednesday) (…) by his Spanish counterpart Teresa Ribera of Spain’s decision to authorize the reverse flow operation of the Maghreb Europe Gas Pipeline” and that “this operation will take place today or tomorrow”.

The press release didn’t name the country that would benefit from this “reverse flow” operation of the pipeline, but the Spanish government announced in February that it would help Rabat “guarantee its energy security” by allowing it to do so to transport gas through the GME after Algiers stopped supplying it.

Any transfer of “quantities of Algerian natural gas delivered to Spain, the destination of which is none other than that provided for in the contracts, will be considered a breach of contractual obligations and could consequently result in a breach of the contract that binds Sonatrach to its Spanish customers,” the Algerian ministry warned.

Western Sahara at the heart of tensions

This warning comes in the context of tensions between Algiers and Madrid over the Western Sahara issue. A former Spanish colony, this vast desert area, considered a “non-autonomous territory” by the United Nations, has for decades opposed Morocco – which controls 80% of it – against the Sahrawi separatists of the Polisario Front.

Spain, which is heavily dependent on Algiers for its gas supplies, radically changed its position on the thorny issue on March 18, publicly backing the Moroccan autonomy project and incurring the wrath of Algiers, the main Polisario supporter.

Algiers recalled its ambassador to Spain on March 19, and Sonatrach mentioned an increase in the price of gas shipped to Spain due to the surge in markets due to Russia’s invasion of Ukraine.

On Saturday, Algerian President Abdelmadjid Tebboune called Madrid’s reversal “morally and historically unacceptable” but assured that Algeria “will not, under any circumstances, renounce its commitments to supply gas to Spain”.

With AFP

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