Algeria threatens to terminate its gas contract with Spain

Algerian hydrocarbon giant Sonatrach provided more than 40% of the natural gas imported by Spain in 2021.

Algeria’s energy ministry on Wednesday threatened to cancel the contract to supply gas to Spain if Spain delivered it “to a third goal”, in the context of diplomatic tensions with Madrid and Morocco around 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 has been informed “Emailed today (Wednesday) from his Spanish counterpart, Ms Teresa Ribera, on Spain’s decision to authorize the operation of the Maghreb Europe Gas Pipeline in counterflow” and “This operation will take place today or tomorrow”.

The press release did not identify the country that would benefit from this operation of the pipeline “countercurrent” but the Spanish government announced in February that it would help Rabat “Ensuring its Energy Security” by allowing him to pipe gas through the GME after Algiers stopped supplying it. Each delivery of “Quantity of Algerian natural gas shipped to Spain, the destination of which is none other than that provided for in the contracts, is considered a breach of contractual obligations and could consequently result in a breach of contract binding Sonatrach to its Spanish customers”, warned the Algerian ministry.

This warning comes in the context of diplomatic tensions between Algiers and Madrid over the issue of Western Sahara, a former Spanish colony that is now considered one “Territory Without Self-Government” the UN and Morocco has been playing off against the Saharawi separatists of the Polisario Front for decades. Spain, which is heavily dependent on Algeria 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 Polisario’s mainstay.

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