As energy crisis looms, Spain shields supply of Algerian gas

MADRID (AP) — Spain launched a diplomatic offensive to preserve its essential stream of Algerian natural gas Thursday as energy prices across the world skyrocket and souring relations between Algeria and Morocco threaten to disrupt the gas supply chain in North Africa.

In Algeria’s latest move to severe commercial and diplomatic ties with the neighboring country, it plans to shut down a pipeline that supplies nearly half of Spain’s imported Algerian natural gas via Morocco. A 25-year distribution agreement ends on Oct. 31.

Algeria has indicated it would continue to supply gas to Spain through a separate pipeline that crosses the Mediterranean Sea and links directly to the Iberian Peninsula, as well as on vessels carrying liquified natural gas, or LNG.

But any disruption is likely to increase costs for Spain. The country’s reliance on Algerian gas has grown in recent years and now accounts for half of all its gas imports.

Spanish Foreign Minister José Manuel Albares made a hasty trip to Algiers, where he was set to meet Thursday with Algerian Foreign Affairs Minister Ramtane Lamamra. The trip had not been scheduled in advance and was announced by Albares’ ministry earlier this week.

After the meeting, Albares told reporters he was “reassured about the continuity of natural gas supplies,” calling Algeria “a first-rate partner for Spain.”

The countries pledged to deepen cooperation on renewable energy, farming and shipbuilding, Albares said.

The visit comes as the Spanish government, and particularly Albares, are trying to mend ties with Morocco, Algeria’s regional rival.

Relations between Spain and Morocco hit a low in May over the two countries’ views of the future of Western Sahara, a former Spanish colony that was annexed by Morocco and which the United Nations says should be subject to decolonization.

The Spanish government already has been grappling to cushion the household impact of rising wholesale electricity prices as a result of increasing global competition for natural gas and bottlenecks in supply chains from the world’s top producers.

Higher utility bills have driven up inflation in Spain, as in much of Europe. Consumer prices increased 4% in September compared to a year earlier, Spain’s statistics institute announced this week, a rise not seen in 13 years.

Experts predict the worst is still to come as the Northern Hemisphere moves into the colder, energy-intensive winter months.

Spain is trying to replenish its gas storage facilities, which were at 72% of their capacity in mid-September, before heating is turned on and increases power consumption.

Albares was accompanied by top executives from Naturgy and Enagás, two of Spain’s biggest energy corporations.

Both Naturgy and Enagás are stakeholders in the Europe-Mahgreb pipeline, or EMPL, which delivers an annual average of 10 billion cubic meters of natural gas to southern Spain via Morocco and across the Strait of Gibraltar.

Naturgy and Algeria’s Sonatrach own the Medgaz pipeline that has linked Algeria directly with the Iberian Peninsula since 2010. That pipeline pumps some 8 billion cubic meters but it was unclear if it would be possible to expand its capacity, as Algeria wants, to absorb the gas delivery that currently goes through Morocco.

Morocco takes 7% of the gas that is pumped through the pipeline, which began operating in November 1996. Its share has become an important contribution to the country’s energy mix and will dry up at the end of October.

Asked by lawmakers in Spain about his upcoming trip to Algeria, Albares said Wednesday that supplies were guaranteed.

“The supply of gas to Spain is not in danger because our Moroccan and Algerian friends want to work together in this field,” the minister said.

Last month, Algeria severed diplomatic ties with Morocco, citing Rabat’s support for the “supposed right to self-determination” of the Kabyle, an Indigenous people of northern Algeria, as well as alleged “acts of espionage” with spyware. The Algerian government announced Sept. 23 it was closing its airspace to all Moroccan planes.