Spain begins gasoline re-exports to Morocco through GME pipeline: Enagas

First piped gasoline to transit from Europe to Africa

1.1 million cu m exported on June 28: Enagas knowledge

Algeria halted gasoline provide to Morocco in November

Spain has begun re-exporting gasoline to Morocco in reverse stream through the GME pipeline, knowledge from Spanish gasoline grid operator Enagas confirmed June 29, marking the primary direct stream of piped gasoline from Europe to Africa.

The stream of gasoline southwards by means of the GME pipeline — which beforehand was used to ship Algerian gasoline through Morocco to Spain — began at 10:00 am native time (0800 GMT) on June 28, with a complete of 1.1 million cu m of gasoline exported.

An additional 83,000 cu m is anticipated to stream throughout the hyperlink on June 29, the info confirmed.

Spain and Morocco agreed earlier this yr to think about using the GME pipeline for reverse stream to the North African nation with the gasoline to be sourced from the worldwide LNG market.

The grid operator didn’t element the place the gasoline for the primary exports was provided from, although two LNG tankers had been unloaded over the weekend of June 25-26 on the nearest ports of Huelva and Cartagena, based on Enagas knowledge.

Sources have informed S&P International Commodity Insights that the Huelva terminal can be essentially the most logical possibility as it’s situated near the entry level of the GME line.

Morocco provide

The beginning of Spanish re-exports to Morocco is a key growth for the area’s gasoline sector and can come as a reduction for Rabat, which was reduce off from Algerian gasoline provide — beforehand its solely exterior supply of gasoline — in November final yr.

Algeria beforehand provided gasoline on to Morocco through the GME hyperlink, partly in lieu of fee for transit, with deliveries seen at some 1 Bcm/yr.

Many of the gasoline was consumed by two gas-fired energy stations at Tahaddart and Ain Beni Mathar that had been provided from Algeria, however the vegetation had been idled after the GME stream was halted.

The nation additionally has restricted home manufacturing that’s provided to native industrial prospects together with automakers and paper mills.

It has additionally launched a young to put in a floating LNG import terminal within the nation because it appears to be like to extend its gasoline provide.

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Regional relations

The choice to halt flows within the GME pipeline — which provided virtually 6 Bcm of gasoline to Spain in 2021 earlier than provides had been suspended — got here amid worsening relations between Algeria and Morocco and the continuing dispute over the autonomy of Western Sahara.

Algeria now solely provides pipeline gasoline to Spain through the direct Medgaz pipeline, whose capability has been expanded to round 10.7 Bcm/yr.

Relations between Algeria and Spain have additionally worsened in latest months after Madrid in March altered its place concerning the autonomy of the Western Sahara area, reversing a decades-old coverage of neutrality.

Algeria in April threatened to terminate gasoline provide contracts between state-owned Sonatrach and Spanish consumers if Algerian gasoline was re-exported to Morocco.

The menace has seen Spain look to develop a brand new system of gasoline origination certification in order that any molecules delivered to Morocco through the GME pipeline working in reverse stream could possibly be confirmed to be non-Algerian.

The tensions come as European gasoline costs stay at sustained highs, largely due to Russian provide uncertainty.

Spanish gasoline stays among the many least expensive of Europe’s traded gasoline hubs thanks largely to its entry to world LNG through its six operational LNG terminals.

The PVB day-ahead contract was assessed on June 28 at Eur113.53/MWh, with solely the UK NBP day-ahead value decrease amongst Europe’s traded hubs, based on Platts value assessments by S&P International Commodity Insights.

The PVB day-ahead was additionally at a reduction of just about Eur16.50/MWh to the Dutch TTF equal.